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James Hyerczyk

Gold futures are edging higher late Wednesday underpinned by hopes for more economic support for the U.S. economy and expectations of a dovish stance from the U.S. Federal Reserve.

Leading U.S. lawmakers reported substantial progress in hammering out COVID-19 relief aid as pressure mounted amid a surge in coronavirus cases in the world’s hardest hit country.

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The Federal Reserve was due to provide a playbook for its economic policy with policymakers set to conclude the final meeting of the year with investors expecting near zero interest rates and more bond-buying.

At 18:32 GMT, February Comex gold is trading $1859.20, up $3.90 or +0.21%.

Dovish Fed monetary policy is providing the longer-term support, while government fiscal stimulus is providing the short-term support.

Traders also said that gold’s gains were capped by optimism over the rollout of the vaccines to fight COVID-19. Moderna Inc’s vaccine appeared set for regulatory approval this week after U.S. Food and Drug Administration staff endorsed it as safe and effective.

Daily February Comex Gold

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through $1879.80 will change the main trend to up. A move through $1820.00 will signal a resumption of the downtrend.

The short-term range is $1973.30 to $1767.20. Its retracement zone at $1870.30 to $1894.60 is resistance.

The minor range is $1767.20 to $1879.80. Its retracement zone at $1823.50 to $1810.20 is support.

The major support is the long-term support zone at $1780.50 to $1705.20.


Daily Swing Chart Technical Forecast

The direction of the February Comex gold market into the close on Wednesday will be determined by trader reaction to the 50% level at $1870.30.

Bullish Scenario

A sustained move over $1870.30 will indicate the presence of buyers. Taking out $1879.80 will change the main trend to up and likely lead to a test of $1894.60. This is a potential trigger point for an acceleration to the upside.

Bearish Scenario

A sustained move under $1870.30 will signal the presence of sellers. This could trigger a break into $1823.50, followed by $1820.00 and $1810.20.

Taking out $1810.20 could trigger an acceleration to the downside with $1780.50 to $1767.20 the primary downside targets.

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