Gold Price Futures (GC) Technical Analysis – Holding $1917.40 Could Trigger Rally into $1939.40

Comex gold futures jumped 1% to its highest level in over a week on Wednesday as investor optimism that a U.S. fiscal stimulus package will be announced before the November 3 presidential elections pressured the U.S. Dollar, driving up foreign demand for the dollar-denominated asset, while bolstering its appeal as an inflation hedge.

On Wednesday, December Comex gold settled at $1929.50, up $14.10 or +0.74%.

Despite the strong finish, the buying looked a little tentative as some investors expressed caution that a deal could be struck in a timely manner that would allow U.S. consumers to start receiving financial aid before the November 3 elections.

Furthermore, there are concerns over the size of the expected stimulus package with some investors saying an even bigger stimulus bill will be forthcoming if Democrat Joe Biden wins the election.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. The uptrend was reaffirmed on Wednesday when buyers took out the swing top at $1923.40. A trade through $1896.60 will change the main trend to down.

From the bottom up, the support is a long-term retracement zone at $1889.70 to $1842.60.

The next support area is a retracement zone at $1895.20 to $1880.00.

Additional 50% support levels come in at $1917.40 and $1902.10.

On the upside, the next target zone and potential resistance is $1970.10 to $1998.20.

Short-Term Outlook

The short-term range is $1983.80 to $1851.00. The market has held inside this zone since late September. Its 50% level at $1917.40 appears to be controlling the near-term direction of the market. Trader reaction to this price is likely to set the tone in the market on Thursday.

Bullish Tone

A sustained move over $1917.40 will indicate the presence of buyers. Continuing to hold above the previous main top at $1923.40 will indicate the buying is getting stronger. This could create the upside momentum needed to challenge the next main top at $1939.40. This is a potential trigger point for an acceleration into the 50% level at $1970.10.

Bearish Tone

A sustained move under $1917.40 will signal the presence of sellers, or that the buying is weakening. This could lead to a labored break with potential support target levels coming in at $1902.10, $1889.70 and $1880.00.

The trigger point for an acceleration to the downside is likely the main bottom at $1877.10.

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