Gold Price Futures (GC) Technical Analysis – Consolidating Inside Retracement Zone at $1889.70 to $1842.60

Gold futures are trading higher late in the session on Thursday on concern over the logistics of a potential COVID-19 vaccine roll-out as U.S. case continued to surge, while hopes of more fiscal and monetary stimulus offered support to the precious metal.

Gold was generally supported by a plunge in U.S. Treasury yields that drove the U.S. Dollar lower. The drop in the greenback made dollar-denominated gold a more attractive investment.

At 19:37 GMT, December Comex gold is trading $1875.50, up $13.90 or +0.75%.

In other news, data on Thursday showed the number of Americans filing new claims for unemployment benefits fell, but the pace of decline has slowed and further improvement could be limited by a raging COVID-19 pandemic.

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 move through $1966.10.

The main range is $1690.10 to $2089.20. The market is in a position to close inside its retracement zone at $1889.70 to $1842.60 for the fourth straight session. This tells us that this zone is controlling the near-term direction of the market.

The minor range is $1966.10 to $1848.00. Its 50% at $1907.10 is resistance and a potential trigger point for an acceleration to the upside.

Short-term Outlook

Trader reaction to $1889.70 and $1842.60 should determine the direction of the gold market over the near-term.

Bullish Scenario

A sustained move over $1889.70 will indicate the presence of buyers. This should lead to a test of $1907.10. Overtaking this level could trigger an acceleration to the upside with $1966.10 – $1970.10 the next likely upside target.

Bearish Scenario

A sustained move under $1842.60 will signal the presence of sellers. This could lead to a labored break however due to a series of potential support levels at $1819.30, $1788.30 and $1772.00.