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James Hyerczyk
Comex Gold

Gold futures are trading higher after a strong performance by the Euro pushed the U.S. Dollar Index lower, driving up demand for dollar-denominated gold. The market is also being influenced by European Central Bank policy decisions and mixed U.S. economic data.

The European Central Bank announced Thursday it was keeping its interest rates and coronavirus-stimulus program unchanged, despite a stronger Euro putting pressure on policymakers.

A surprisingly low inflation reading in August, the lowest since 2001, also raised questions about whether the ECB will have to do more to revamp the Euro economy.

The ECB decided to not take any major action for now, although investors will be watching the central bank head Christine Lagarde’s upcoming press conference for any policy fine-tuning.

At 13:16 GMT, December Comex gold futures are trading $1971.40, up $16.50 or +0.84%.

In economic news, weekly jobless claims were worse than expected last week amid a plodding climb for the U.S. labor market from the damage inflicted by the coronavirus pandemic.

The Labor Department reported 884,000 first-time filings for unemployment insurance, compared to the 850,000 expected by economists surveyed by Dow Jones. The total was unchanged from the previous week.

Daily December Comex Gold

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through $2001.20 will signal a resumption of the uptrend, followed by another main top at $2024.60. A new main bottom has formed at $1911.70. A trade through this bottom will change the main trend to down.

The minor range is $1908.40 to $2001.20. The market crossed to the strong side of its pivot at $1954.80 triggering an acceleration to the upside.

The short-term range is $2089.20 to $1874.20. Its retracement zone at $1981.70 to $2007.10 is the next upside target and potential resistance area. This zone stopped the rally at $2001.20 on September 1.

On the downside, the major support is the retracement zone at $1889.70 to $1842.60.

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Daily Swing Chart Technical Forecast

The tone of the market will be determined by trader reaction to the pivot at $1954.80.

Bullish Scenario

Look for a strong upside bias as long as December Comex gold futures can hold above $1954.80. If this creates enough upside momentum then look for the rally to possibly extend into the short-term 50% level at $1981.70, followed by the main top at $2001.20 and the short-term Fibonacci level at $2007.10.

Bearish Scenario

A sustained move under $1954.80 will signal the presence of sellers. This could trigger a break into $1942.20, followed by the main bottom at $1911.70.

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

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