Gold futures plunged on Friday, retreating from a one-month high reached in the previous session, as a firmer U.S. dollar dampened investment appeal from the asset denominated in dollars. Nonetheless, the greenback’s weakness throughout the week is what helped the precious metal score its third consecutive weekly advance.
At 9:33 p.m. GMT, February’s Comex gold is trading at $ 1,886.50, down $ 3.90 or -0.21%.
Uncertainty over the size and timing of new government stimulus measures may have capped gold’s upside potential. As coronavirus infections return to new record highs across the United States, pressure has mounted on lawmakers to provide more emergency aid in time for a crucial Friday deadline.
Before the weekend, the main focus remains to find out if there is a stimulus deal before Monday morning.
Technical analysis of the daily swing chart
The main trend is up according to the daily swing chart. The trend began on Thursday when buyers pulled out $ 1,879.80. A trade up to $ 1820.00 will change the main downtrend.
The short-term range is $ 1973.30 to $ 1767.20. Its $ 1870.30 to $ 1894.60 retracement area is potential resistance. It is currently being tested.
The minor range is $ 1,820.00 to $ 1,902.00. Its $ 1861.00 to $ 1851.30 retracement area is a potential downside target.
Major support is a long term retracement area between $ 1780.50 and $ 1705.20.
Daily Swing Chart Technical Forecasts
The price fluctuations in December all made headlines. The headline was about the stimulus.
The market is currently testing a key retracement area between $ 1870.30 and $ 1894.60. The trader’s reaction to this area will determine the next major move. Needless to say, a two-way breakout will need to be fueled by a stimulus headline in order to attract the volume needed to follow.
Bullish developments should trigger an upward breakout with the Fibonacci level triggering at $ 1894.60 or yesterday’s high at $ 1902.00. The daily chart shows no visible resistance up to $ 1973.30.
A move to the 50% level at $ 1,870.30 will be a sign of weakness. However, the early sell will be laborious due to minor retracement levels at $ 1861.00 and $ 1851.30.
We might see a spike to the downside if $ 1851.30 fails as support with $ 1820.00 the next major target.
For an overview of all of today’s economic events, check out our economic calendar.
