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James Hyerczyk
Comex Gold

Gold futures surged on Tuesday in reaction to a plunge in U.S. Treasury yields and a steep sell-off in the major U.S. equity indexes. The safe-haven Japanese Yen and Swiss Franc also posted strong gains against the U.S. Dollar, driving up demand for dollar-denominated gold futures.

Comments from U.S. President Donald Trump were the catalysts behind gold’s rally. He raised doubts over U.S.-China trade relations after he said a trade deal with China might have to wait until after the 2020 U.S. presidential election.

At 03:27 GMT, February Comex gold is trading $1485.80, up $1.40 or +0.10%.

Appetite for gold was also boosted after Trump on Monday said his administration would impose tariffs on metal imports from Argentina and Brazil and likely would impose more on a range of French goods.

Monday’s weak U.S. manufacturing report also continued to underpin gold prices. The U.S. Institute for Supply Management said its index of national factory activity fell to a below-forecast 48.1 in November, indicating contraction in the sector.

Daily February Comex Gold

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. The main trend changed to up on Tuesday when buyers nudged through the previous main top at $1486.00. The main bottoms supporting the rally are at $1456.60 to $1453.10.

The nearest support is a long-term Fibonacci level at $1477.30.

Short-term resistance is a 50% level at $1489.10. Longer-term resistance is $1495.30.

The main range is $1571.70 to $1453.10. Its retracement zone at $1512.40 to $1526.40 is a potential upside target zone.

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Daily Swing Chart Technical Forecast

Based on yesterday’s price action and the current price at $1485.80, the direction of the February Comex gold futures contract the rest of the session on Wednesday is likely to be determined by trader reaction to the short-term 50% level at $1489.10.

Bullish Scenario

A sustained move over $1489.10 will indicate the presence of buyers. The first target is $1495.30. This is a potential trigger point for an acceleration to the upside with $1512.40 the next major upside target.

Bearish Scenario

A sustained move under $1489.10 will signal the presence of sellers. This could trigger a break into $1477.30. Since the main trend is up, buyers could come in on a test of this level. If it fails then look for the selling to possibly extend into a minor 50% level at $1472.10.

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