Gold Price Futures (GC) Technical Analysis – Strengthens Over $1917.40, Weakens Under $1889.70
Comex gold futures moved higher on Tuesday, boosted by a weaker U.S. Dollar and concerns over a second surge in coronavirus cases, although the volume and the trading range were so tight, it was hard to tell if we were witnessing actual buying or just short-covering.
At 20:46 GMT, December Comex gold is trading $1909.00, up $3.30 or +0.17%.
The narrow trading range was also caused by investors shifting their focus on next week’s U.S. presidential election. Democratic challenger Joe Biden leads President Donald Trump in national polls but the race is much tighter in battleground states that determine the election outcome.
The consensus among traders is that a win by Biden will mean massive stimulus on coronavirus relief and infrastructure spending. This should weaken the U.S. Dollar and drive gold prices higher. Longer-term, the market is expected to be well-supported by accommodative central banks.
Daily Swing Chart Technical Analysis
The main trend is down according to the daily swing chart. A trade through $1936.00 will change the main trend to up. A move through $1885.00 will reaffirm the downtrend.
The short-term range is $1983.80 to $1851.00. Its 50% level or pivot at $1917.40 is potential resistance.
The longer-term retracement zone at $1889.70 to $1842.60 is support.
The market has been trading inside a pair of 50% levels at $1889.70 and $1917.40 for four sessions. This usually indicates investor indecision and impending volatility.
Short-Term Outlook
We’re looking for a rangebound trade as long as the market remains inside $1889.70 and $1917.40.
Look for a bullish tone to develop on a sustained move over $1917.40. This could trigger a rally into the main tops at $1936.00 and $1939.40. The latter is a potential trigger point for an acceleration to the upside with the next major target coming in at $1970.10.
A sustained move under $1889.70 will indicate the selling is getting stronger. Taking out the main bottoms at $1885.00 and $1877.10 could trigger the start of an acceleration to the downside with the next major targets a main bottom at $1851.00 and the major Fibonacci level at $1842.60.
For a look at all of today’s economic events, check out our economic calendar.
This article was originally posted on FX Empire
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