Gold Price Futures (GC) Technical Analysis – Weakens Under $1889.70, Strengthens Over $1907.10

Gold futures are trading nearly flat on Monday after touching a one-week high early in the session. The dollar-denominated asset is being supported by a weaker U.S. Dollar, a slight dip in U.S. Treasury yields and a rise in demand for equities.

Additionally, mounting coronavirus cases continue to fuel concerns over the pandemic’s impact on the global economic recovery, but this is being offset by renewed expectations for further fiscal stimulus from the government and sustained monetary stimulus from the U.S. Federal Reserve.

At 07:12 GMT, December Comex gold futures are trading $1886.00, down $0.20 and -0.01%.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through $1848.00 will signal a resumption of the downtrend. The main trend will change to up on a trade through $1966.10.

The main range is $1690.10 to $2089.20. The market is currently testing its retracement zone at $1889.70 to $1842.60. This zone appears to be controlling the near-term direction of the gold market.

The minor range is $1966.10 to $1848.00. Its 50% level at $1907.10 is resistance, but it’s also a potential trigger point for an acceleration to the upside.

Daily Swing Chart Technical Forecast

The direction of the December Comex gold futures contract on Monday is likely to be determined by trader reaction to the 50% level at $1889.70.

Bearish Scenario

A sustained move under $1889.70 will indicate the presence of sellers. If this creates enough downside momentum then look for the selling to extend into last week’s low at $1848.00, followed by the main Fibonacci level at $1842.60.

Bullish Scenario

A sustained move over $1889.70 will signal the presence of buyers. This is followed by the pivot at $1907.10. Since the main trend is down, sellers could come in on the first test of this level. Taking it out, however, could trigger an acceleration to the upside with the next target a resistance cluster at $1966.10 to $1970.10.

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