Gold Price Futures (GC) Technical Analysis – 50% Level at $1512.40 Key Level to Watch Monday

Gold finished higher on Friday after hitting its highest level since November 4 earlier in the session. The market also put in its best weekly performance in more than four months. Some traders are saying gold is being driven higher by a weaker U.S. Dollar as investors liquidate safe-haven hedge positions in the greenback.

Others are saying gold is being supported by uncertainty over the U.S.-China trade deal as investors seek more details about the plan. Still others have doubts about the rally and are calling it end of the year position-squaring. Furthermore, they feel that there is just too much demand for risky assets to sustain any rally in gold.

Last week, February Comex gold settled at $1518.10, up $3.70 or +0.24%.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. The uptrend was reaffirmed on Friday when buyers took out the previous session’s high. The main trend will change to down on a move through the last swing bottom at $1463.00.

We’re not looking for a change in trend over the near-term, but there is room to the downside for a normal 50% to 61.8% correction.

Additionally, due to the prolonged move up in terms of price and time, the market is in the window of time for a closing price reversal top. If confirmed, this chart pattern could trigger the start of a 2 to 3 day correction.

The main range was formed by the September 4 main top at $1571.70 and the November 12 main bottom at $1453.10. Its retracement zone at $1512.40 to $1526.40 is currently being tested. This zone is controlling the near-term direction of the market.

Daily Gann Angle Technical Analysis

On Friday, February Comex gold closed on the strong side of an uptrending Gann angle at $1515.10. This angle is moving up at a rate of $2.00 per day from the $1453.10 main bottom.

Holding above this uptrending Gann angle could generate the upside momentum needed to test the nearest downtrending Gann angle at $1531.70.

A failure to hold above $1531.70 will indicate the buying is getting weaker or the selling is getting stronger. This could trigger an acceleration to the downside since the nearest support angle comes in at $1484.10.

Short-Term Outlook

It all comes down to how traders respond to the retracement zone at $1512.40 to $1526.40.

Holding inside the zone will indicate a neutral to upside bias.

Overtaking and sustaining a rally over the upper or Fibonacci level at $1526.40 will signal the buying is getting stronger, while a sustained move under the lower or 50% level at $1512.40 will indicate the presence of sellers. This could trigger the start of a steep break.