Gold prices recovering from the $1,485.39 lows

Gold prices have been recovering from the $1,485.39 lows, travelling as high as $1,497.66 and is currently trading 0.69% higher on the day as investors weigh the prospects of talks taking place between the U.S. and China over trade. However, Gold for December delivery on Comex fell 30 cents, or 0.02%, to $, 1498.90 an ounce, while December silver dropped back 8.6 cents, or 0.5%, to $18.10 an ounce. 

In gold, we have seen four consecutive sessions of declines with markets turning up the appetite for risk as traders return from summer holidays and a season of risk-off associated to trade wars and global growth diminishing. However, in recent sessions, the news that China is addressing sluggish growth and trade wars with stimulus measures has lifted spirits and word that Washington and Beijing are set to start up trade talks again, despite the recently imposed fresh tit for tat tariffs, has blown some of the speculative air out of precious metals of late. 

Gold/silver ratio recently made a 50% Fibonacci retracement of the summer 2016 lows to 2019 highs

Meanwhile, there has been a keen eye on the gold and silver ratio whereby silver has been playing catch up. The ratio recently made a 50% Fibonacci retracement of the summer 2016 lows to 2019 highs with the bias in favour of further downside on a break below the 200-week moving average located in close proximity.

Gold levels

Despite the meanwhile correction, gold is heavy while below the 21-day moving average as it presses on the 23.6% Fibonacci (Fibo) retracement of the July lows to recent swing highs as well as trading below the 1500 handle. Below the 1,480 target, 1,478 comes as the 13 August volatility spike low which guards the 19 July swing highs at 1,452.93. Bulls will need to get back above 1,550 which then guards prospects for 1,590 as the 127.2% Fibo target area. 

Silver levels

The  21-day moving average is supporting and the bullish pin bar is keeping bullish prospects alive. However, failure to advance beyond 18.80 will likely leave the door open for bears to jump in and force out a downside play to the17.50s a being the 50% Fibo of 2016 highs to recent swing lows.