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James Hyerczyk

Gold futures are trading better at the mid-session on Wednesday as investors await the release of the Federal Reserve monetary policy meeting minutes at 18:00 GMT. Traders will be looking at the minutes for clues as to whether policymakers are prepared to make any more stimulus moves to compact the impact of coronavirus on the economy.

At 16:00 GMT, June Comex gold is trading $1686.90, up $3.20 or +0.19%.

Gold traders are also reacting to intraday weakness in the U.S. Dollar. The greenback has given back nearly all of its earlier gains after investment sentiment turned bullish following positive statement about the slowing of new cases of the coronavirus at U.S. hot spots.

The shift in investor sentiment is also helping to drive stock prices higher. Today marks one of the few days over the past month where gold and stocks have not moved locked step.

Daily June Comex Gold

Daily Technical Analysis

The main trend is up according to the daily swing chart, but yesterday’s closing price reversal top may be an early indication that momentum is getting ready to shift to the downside.

A trade through $1742.60 will negate the closing price reversal top and signal a resumption of the uptrend. The main trend will change to down if sellers take out the last swing bottom at $1576.00.

The short-term range is $1576.00 to $1742.60. Its retracement zone at $1659.30 to $1639.60 is the primary downside target.


Daily Outlook

On the downside, the nearest targets are a short 50% level at $1659.30 and an uptrending Gann angle at $1656.00. Since the main trend is up, look for buyers to show up on a test of this area.

If $1656.00 fails as support then look for the selling to possibly extend into the Fibonacci level at $1639.60. This is also possible support.

Crossing to the weak side of the Fibonacci level is likely to trigger a further break into the uptrending Gann angle at $1616.00.

On the upside, the first target is a minor pivot at $1706.70. This is followed by a steep uptrending Gann angle at $1736.00 and the closing price reversal top at $1742.60.

Side Notes

Look for volatility and a possible two-sided trade at 18:00 GMT following the release of the Fed minutes.

We could also be looking at a wicked 2-sided trade. If the Fed promises more stimulus then prices could whip-saw over the short-run. This will be good news for long-term investors, but not necessarily for short-term traders especially if the stock market soars on the news.

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