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James Hyerczyk
Comex Gold

Gold futures edged higher on Tuesday as the dollar weakened and hopes for a U.S. coronavirus aid package ahead of the presidential election boosted bullion’s appeal as an inflation hedge.

U.S. House of Representatives Speaker Nancy Pelosi and Treasury Secretary Steve Mnuchin “continued to narrow their differences” on the stimulus package, Pelosi’s spokesman Drew Hammill said.

On Tuesday, December Comex gold settled at $1915.40, up $3.70 or +0.19%.

The U.S. Dollar Index slipped 0.4% against its rivals to its lowest since September 21, making gold less expensive for holders of other currencies.

Daily December Comex Gold

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart, however, momentum is trending lower. The main trend will change to down on a trade through $1885.00. A move through $1939.40 will reaffirm the uptrend.

The minor trend is down. This is controlling the downside momentum. A trade through $1923.40 will change the minor trend to up, reversing momentum to the upside.

From the bottom up, the major support is the retracement zone at $1889.70 to $1842.60. This zone stopped the selling at $1851.00 on September 24, at $1877.10 on October 7 and at $1885.00 on October 14.

The first minor range is $1851.00 to $1939.40. Its retracement zone at $1895.20 – $1880.00 is support.

The second minor range is $1877.10 to $1939.40. Its 50% level at $1902.10 is another support level.

The short-term range is $1983.80 to $1851.00. Its 50% level at $1917.40 is resistance. Overcoming this level will indicate the buying is getting stronger.

The intermediate range is $2089.20 to $1851.00. Its retracement zone at $1970.10 to $1998.20 is the primary upside target area.


Short-Term Outlook

We’re in a headline driven market, which usually means we watch for a breakout.

Bullish Scenario

A new fiscal stimulus deal will be bullish news. Overtaking $1917.40 will indicate the presence of buying. Taking out $1923.40 could trigger an acceleration to the upside with the next target the main top at $1939.40.

The main top at $1939.40 is another potential trigger point for an upside breakout. This could create the momentum needed to challenge the short-term 50% level at $1970.10.

Bearish Scenario

A sustained move under $1902.10 will signal the presence of sellers. This could lead to a labored break with potential downside targets coming in at $1889.70, $1885.00, $1880.00 and $1877.10. The latter is a potential trigger point for an acceleration to the downside.

For a look at all of today’s economic events, check out our economic calendar.

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