Gold Price Futures (GC) Technical Analysis – Bullish Over $1917.40, Bearish Under $1889.70

Gold prices rose on Tuesday as the U.S. Dollar fell against a basket of major currencies as investors bet on increased stimulus if Joe Biden wins the U.S. presidential election against President Donald Trump.

The dollar slid on the notion a Biden victory would weaken the greenback as the former Democratic vice president is expected to spend big on stimulus and take a more market-friendly approach to trade boosting other currencies at the dollar’s expense.

On Tuesday, December Comex gold futures settled at $1910.50, up $18.00 or +0.95%.

Gains may have been capped by the possibility that there is going to be chaos and controversy surrounding the U.S. election results. These include predictions of lawsuits and recounts. If this is the case then investors could jump into the safe-haven U.S. Dollar, driving down gold prices.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. The main trend will change to up on a move through the nearest swing top at $1936.00. A trade through $1859.20 will reaffirm the downtrend.

The minor trend is also down. A trade through $1913.80 will change the minor trend to up. This will also shift momentum to the upside.

On the downside, key support is the long-term 50% level at $1889.70. This is followed by the long-term Fibonacci level at $1842.60.

On the upside, the resistance is the 50% level at $1917.40. This is a potential trigger point for a spike to the upside.

The minor range is $1936.00 to $1859.20. Gold is currently straddling its retracement zone at $1897.60 to $1906.70.

Short-Term Forecast

We mentioned on Monday that a rally could be a labored event until the market can clear a number of retracement levels. On Tuesday, the gold market closed inside a pair of 50% levels at $1889.70 to $1917.40. Trader reaction to these level should set the tone on Wednesday.

Bullish Scenario

A sustained move over $1917.40 will indicate the buying is getting stronger. This could trigger a surge into a pair of main tops at $1936.00 and $1939.40.

Taking out $1939.40 could trigger an acceleration to the upside with the minimum target another 50% level at $1970.10.

Bearish Scenario

A sustained move under $1889.70 will signal the presence of sellers. This could trigger a quick break into around $1885.70. If this fails then look for the selling to extend into the main bottom at $1859.20, followed by the main Fibonacci level at $1842.60.

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