Gold Price Futures (GC) Technical Analysis – Strengthens Over $1889.70, Weakens Under $1877.10

Gold futures closed lower on Tuesday as the U.S. Dollar rallied on an impasse over U.S. stimulus and as investors reacted to a slightly less bleak economic report card from the International Monetary Fund (IMF).

The U.S. Dollar was also supported as risk appetite weakened after Johnson & Johnson said on Tuesday it is pausing a clinical trial of a coronavirus vaccine and Eli Lilly and Co also said it paused a coronavirus antibody treatment.

At 02:42 GMT, December Comex gold futures are trading $1895.20, up $0.60 or +0.03%.

Also on Tuesday, the dollar jumped, making gold more expensive for foreign buyers, after policymakers reached another stalemate over stimulus. Traders also reacted to comments from the IMF, which suggested less urgency for additional central bank stimulus. The IMF forecasts for the global economy were “somewhat less fire” as wealthy countries and China rebounded more quickly than expected.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through $1877.10 will change the main trend to down. A move through $1939.40 will reaffirm the uptrend.

The main retracement zone support is $1889.70 to $1842.60. This zone stopped the selling at $1851.00 on September 24 and at $1877.10 on October 7 at $1877.10.

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

On the upside, minor resistance is a pair of 50% levels at $1902.10 and $1917.40.

Daily Swing Chart Technical Forecast

The early price action suggest that the direction of the December Comex gold market on Wednesday 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 labored rally with potential resistance coming in at $1902.10 and $1917.40. The latter is the last potential resistance before the $1939.40 main top.

Bearish Scenario

A sustained move under $1889.70 will signal the presence of sellers. This is followed by the minor Fibonacci level at $1880.00 and the main bottom at $1877.10. The latter is a potential trigger point for an acceleration to the downside with the next potential targets the main bottom at $1851.00 and the main Fibonacci level at $1842.60.