Gold, Silver, Platinum, Palladium

Gold Price Futures (GC) Technical Analysis – Bullish Speculators Betting on Fresh Fiscal Stimulus

Gold futures are inching toward a new contract high early Tuesday and spot prices are nearing a nine-year high as demand is being boosted by expectations of higher inflation from more stimulus measures to mitigate the economic blow from a possible second-wave of COVID-19 cases.

Advisers to U.S. President Donald Trump and congressional Democrats were set to discuss the next steps in responding to the coronavirus crisis on Tuesday, with congressional Republicans saying they were working on a $1 trillion relief bill.

At 04:17 GMT, August Comex gold futures are trading $1821.20, up $3.80 or +0.21%.

Gold tends to benefit from widespread stimulus measures from governments and central banks because it is widely viewed as a hedge against inflation and currency debasement.

Daily August Comex Gold

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade though $1829.80 will reaffirm the uptrend. A move through $1766.30 will change the main trend to down.

The minor trend is also up. The minor trend changes to down on a trade through $1791.10. This will also shift momentum to the downside.

The minor range is $1829.80 to $1791.10. Its 50% level at $1810.50 is support.

The short-term range is $1754.00 to $1829.80. Its 50% level at $1791.90 is another support level.

Daily Swing Chart Technical Forecast

Look for the uptrend to continue to extend toward the main top at $1829.80 as long as buyers continue to support the minor pivot at $1810.50.

Side Notes

The market is moving higher on speculation of more fiscal stimulus. This is driving the short-term trend and the rally will likely end when the deal is done. We’re basically seeing the early stages of a “buy the rumor, sell the fact” situation.

Monetary stimulus from the Fed would be the main driver of the longer-term trend. In that case, the rally would last longer.

For a look at all of today’s economic events, check out our economic calendar.

Published by

James Hyerczyk

James A. Hyerczyk has worked as a fundamental and technical financial market analyst since 1982. His technical work features the pattern, price and time analysis techniques of W.D. Gann.