Gold Price Futures (GC) Technical Analysis – Facing Wall of Resistance Between $1889.70 and $1917.40
Gold futures are holding steady late in the session on Monday despite a firmer U.S. Dollar and strong demand for higher risk assets. Some traders are saying a spike in global coronavirus cases is helping to underpin the dollar-denominated assets because of their potential to weaken the global economic recovery. This could lead to additional monetary stimulus from the central banks and fore fiscal stimulus from the U.S. government.
At 18:53 GMT, December Comex gold futures are trading $1893.30, up $13.40 or +0.71%.
Traders are also monitoring the polls before the U.S. presidential election on Tuesday. Democrat Joe Biden is leading U.S. President Donald Trump in national opinion polls, but the race is tight in several battleground states, with mounting fears the results may not be clear on Tuesday night as ballot counting could take days.
Daily Swing Chart Technical Analysis
The main trend is down according to the daily swing chart. A trade through main bottoms at $1859.20 and $1851.00 will reaffirm the downtrend. The main trend will change to up on a move through the nearest main top at $1936.00.
The minor trend is also down. The minor trend will change to up on a trade through $1913.80. This will also shift momentum to the upside.
The main range is $1690.10 to $2089.20. This zone is major support. It stopped the selling at $1851.00 on September 24 and at $1859.20 on October 29. If it fails to hold, we could see an acceleration to the downside into the July 14 main bottom at $1819.30.
On the upside, potential resistance levels are layered at $1889.70, $1897.60, $1906.70 and $1917.40.
Daily Swing Chart Technical Forecast
The recent price action suggests $1889.70 to $1842.60 has to hold as support or prices could collapse. On Monday, traders are trying to settle the market above the upper or 50% level at $1889.70.
Although a close over $1889.70 will indicate the presence of buyers, the ensuing rally is likely to be labored with potential resistance layered at $1897.60, $1906.70 and $1917.40.
Even if the market clears $1917.40, a pair of main tops at $1936.00 and $1939.40 could stop the rally. I don’t think we can get a clean breakout to the upside unless the buying takes out $1939.40. The next major upside target would be $1970.10 to $1998.20.