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James Hyerczyk

Gold futures are inching higher early Thursday as a softer U.S. Dollar and signs of progress in negotiations over fresh U.S. stimulus measures made the dollar-denominated asset more desirable.

Underpinning prices on Wednesday are comments from U.S. Treasury Secretary Steven Mnuchin. He said talks with House Speaker Nancy Pelosi “made a lot of progress” on the long-awaited COVID-19 relief legislation.

At 06:16 GMT, December Comex gold is trading $1902.40, up $6.90 or +0.36%.

Gains are likely being capped, however, on the news that Pelosi and Mnuchin failed to strike a coronavirus stimulus deal during a more than 90-minute meeting Wednesday. Meanwhile, Senate Majority Leader Mitch McConnell, who opposes the bill, said the two parties are still “far apart”.

On Thursday, gold traders will get the opportunity to trade the U.S. initial jobless claims report at 12:30 GMT and Friday’s U.S. Non-Farm Payrolls report. Both will offer clues about the pace of the recovery in the U.S.

Daily December Comex Gold

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. However, momentum is trending higher. A trade through $1851.00 will signal a resumption of the downtrend. A move through $1983.80 will change the main trend to up.

The major support area is a retracement zone at $1889.70 to $1842.60. Inside this zone is a minor 50% level at $1979.60 that is also providing support.

The minor range is $1983.80 to $1851.00. Its 50% level at $1917.40 is the next upside target and possible resistance. However, it’s also a potential trigger point for an acceleration to the upside.

The short-term range is $2089.20 to $1851.00. Its retracement zone at $1970.10 to $1998.20 is the primary upside target.


Daily Swing Chart Technical Forecast

Based on the early price action, the direction of the December Comex gold market on Thursday is likely to be determined by trader reaction to the main 50% level at $1889.70.

Bullish Scenario

A sustained move over $1889.70 will indicate the presence of buyers. This could trigger a move into $1908.20, followed closely by the minor pivot at $1917.40.

Overtaking $1917.40 could trigger an acceleration to the upside with the short-term 50% level at $1970.10 the next key upside target.

Bearish Scenario

A sustained move under $1889.70 will signal the presence of sellers. This could lead to a quick break into $1879.60. The market could accelerate into $1851.0 to $1842.60 if this level fails.

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