Gold a little higher on the day but buyers are in a precarious spot

Technical Analysis

Author: Justin Low | gold

The slightly softer risk mood sees gold trade 0.3% higher today

Gold 11-11
But a lot can still go wrong for gold.

The move lower towards the end of last week saw price ease below its 100-day MA (red line) for the first time since June this year and buyers barely survived a firm break below the October low/support of $1,459.14.

So, despite price holding up a little today, more positive trade headlines could easily nudge gold lower down the road - particularly if the Fed communication this week continues to suggest a pause in rate cuts over the next few months.

For me, I still view any significant pullback in gold to be a plausible bargain in the long-run but it all depends on how things develop with trade talks and the global economy.

There are signs that things may not be all bad in the year ahead but we'll have to wait and see if the narrative holds true.

In any case, just be wary of the January seasonal demand for gold (which has the potential to spill over into December on some years) and that could present a good opportunity to get in on dips if the pullback extends firmly below the October low.

Further swing region support is seen around $1,437 to $1,450 before the $1,400 handle and the 200-day MA (blue line) comes into play.

Those will be key levels to eye for dip buyers over the next few weeks, depending on how US-China trade headline develops, as we move into the seasonal play in late December to January for gold.

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