Gold futures are posting a choppy, two-sided trade on Monday. The market opened sharply lower but then turned slightly higher for the session as traders reassessed the probability of a stimulus deal getting agreed upon by the November 3 presidential election. Given the strength in the U.S. Dollar Index, it appears that there won’t be a fiscal stimulus deal before voters go to the polls. However, new worries over the economic impact of the pandemic are providing some support.
At 15:18 GMT, December Comex gold futures are trading $1906.00, up $0.80 or +0.04%.
Traders are also monitoring the polls ahead of the election. Although Democratic candidate Joe Biden is predicted to win, the numbers may be contested by President Trump. However, if Biden wins then investors expect to see even more stimulus measures in 2021. This should be bullish for gold.
Daily Swing Chart Technical Analysis
The main trend is down according to the daily swing chart. A trade through $1936.00 will change the main trend to up. A move through the last swing bottom at $1885.00 will signal a resumption of the downtrend.
On the downside, support is a long-term 50% level at $1889.70 and a minor Fibonacci level at $1880.00.
The market is straddling a 50% level at $1902.10, but traders haven’t decided if this level is support or resistance yet.
On the upside, the resistance is a 50% level at $1917.40.
Basically, the market is trapped inside a wide range of retracement levels with $1917.40 the top end of the range and $1880.00 the bottom end of the range.
Low volume and investor uncertainty could hold the gold market inside the range formed by $1917.40 and $1880.00 until at least after the November 3 election. If this is the case then treat $1917.40 as a potential trigger point for an acceleration to the upside and $1880.00 as a potential trigger point for an acceleration to the downside.
Short-term traders can use $1902.10 as a pivot.
For a look at all of today’s economic events, check out our economic calendar.
This article was originally posted on FX Empire