Gold Price Futures (GC) Technical Analysis – Sitting Between $1889.70 and $1842.60 as Traders Await Catalyst

Gold futures are drifting higher on Thursday with the move supported by a modest dip in the U.S. Dollar against a basket of major currencies. Falling Treasury yields and a drop in demand for equities are also underpinning gold prices.

Capping the market this week are concerns that a COVID-19 vaccine would open up the global economy faster than expected, dampening the need for aggressive fiscal and monetary stimulus.

Underpinning prices are worries that the vaccine would take months to distribute and become effective, which would be too late to avoid another economic downturn in the global economy. This would increase the need for more stimulus measures.

At 02:34 GMT, December Comex gold futures are trading $1867.40, up $5.80 or +0.31%.

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 with $1819.30 the next potential downside target.

A trade through $1966.10 will change the main trend to up. This is highly unlikely, but there is room to the upside for a normal 50% to 61.8% of Monday’s sell-off.

The main range is $1690.10 to $2089.20. The market is currently trading inside its retracement zone at $1889.70 to $1842.60, indicating investor indecision.

The minor range is $1966.10 to $1848.00. Its 50% level at $1907.10 is the next likely upside target. Since the main trend is down, sellers could come in on the initial test of this price.

Daily Swing Chart Technical Forecast

We expect to see a sideways trade as long as the market holds between $1889.70 and $1842.60. These are the expected trigger points for the next move.

Bullish Scenario

A sustained move over $1889.70 will indicate the presence of buyers. This could spike prices into $1907.10. This is a potential trigger point for an acceleration to the upside with the next major target a resistance cluster at $1966.10 – $1970.10.

Bearish Scenario

The inability to overcome $1889.70 will signal the presence of sellers, but it’s going to take a breakdown under $1842.60 to trigger an acceleration to the downside with the next potential target the July 14 bottom at $1819.30.

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