Gold Price Futures (GC) Technical Analysis – Could Strengthen Over $1889.70, Weaken Under $1842.60

Gold futures edged higher on Tuesday, but gains were likely limited by a slightly stronger U.S. Dollar and steady-to-higher U.S. Treasury yields. Generally soft demand for higher risk assets also underpinned gold prices after yesterdays steep plunge. Some traders said concerns over the speed over of the global economic recovery and expectations of further fiscal and monetary stimulus offered support to dollar-denominated asset.

At 21:39 GMT, December Comex gold futures are trading $1875.30, up $20.90 or +1.13%.

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On Monday, gold dropped 4.6% after U.S. drugmaker Pfizer Inc said its COVID-19 vaccine was more than 90% effective based on initial trial results, lifting U.S. equities to record highs.

However, shares eased on Tuesday as worries about the extent of the COVID-19 pandemics economic impact resurfaced. This helped underpin gold prices. Furthermore, gold buyers are anticipating more accommodation from the central banks and additional fiscal stimulus from governments.

[fx-image src=/2020/11/Daily-December-Comex-Gold-3.jpg data-zoom-target=https://responsive.fxempire.com/cdn/n/n/_fxempire_/2020/11/Daily-December-Comex-Gold-3.jpg originalWidth=1920 ratio=1.99]Daily December Comex GoldDaily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. The trend turned down on Monday when sellers took out the last swing bottom at $1859.20. A move through Tuesdays low at $1848.00 will signal a resumption of the downtrend. The main trend will change to up on a move through the last main top at $1966.10.

The main range is $1690.10 to $2089.20. Gold is currently trading inside its retracement zone at $1889.70 to $1842.60.

The new minor range is $1966.10 to $1848.00. Its 50% level at $1907.10 is potential resistance.

The new short-term range is $2089.20 to $1848.00. Its retracement zone at $1970.10 to $1998.20 is a potential upside target.

[fx-article-ad]Short-Term Outlook

The price action the last two sessions indicates the near-term direction is being controlled by the 50% level at $1889.70 and the 61.8% level at $1842.60.

Bullish Scenario

A sustained move over $1889.70 will indicate the presence of buyers. The first target is the pivot at $1907.10. This is also a potential trigger point for an acceleration to the upside with the next target a resistance cluster at $1966.10 to $1970.10.

Bearish Scenario

A sustained move under $1848.00 will signal the presence of sellers. The first three potential targets are main bottoms at $1819.30, $1788.30 and $1772.00. The latter is a potential trigger point for an acceleration into the June 5 bottom at $1690.10.

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