Gold futures are trading higher after a strong euro performance pushed the US dollar index lower, boosting demand for dollar-denominated gold. The market is also being influenced by political decisions from the European Central Bank and mixed economic data from the United States.
The European Central Bank announced Thursday that it will keep its interest rates and its stimulus program for the coronavirus unchanged, despite the fact that a stronger euro puts pressure on authorities.
A surprisingly low inflation reading in August, the lowest since 2001, also raised questions about whether the ECB will have to do more to revamp the euro economy.
The ECB decided not to take any major action for now, although investors will be watching the central bank chief Christine Lagarde’s upcoming press conference for any policy adjustments.
At 13:16 GMT, Comex December gold futures are trading at $ 1971.40, up $ 16.50 or + 0.84%.
In economic news, weekly jobless claims were worse than expected last week amid a slow ascent for the US job market from the damage inflicted by the coronavirus pandemic.
The Labor Department reported 884,000 applications for unemployment insurance for the first time, compared to the 850,000 expected by economists surveyed by Dow Jones. The total was unchanged from the previous week.
Daily swing chart technical analysis
The main trend is bullish according to the daily swing chart. A trade through $ 2001.20 will indicate a resumption of the uptrend, followed by another major top at $ 2024.60. A new main floor has been formed at $ 1911.70. A trade through this fund will change the main downward trend.
The lower range is $ 1908.40 to $ 2001.20. The market crossed to the strong side of its pivot at $ 1954.80, causing an acceleration to the upside.
The short-term range is $ 2,089.20 to $ 1,874.20. Its retracement zone at $ 1981.70 to $ 2007.10 is the next bullish target and potential resistance area. This zone stopped the rally at $ 2001.20 on September 1.
On the downside, the main support is the retracement zone at $ 1889.70 to $ 1842.60.
Oscillation chart daily technical forecast
The tone of the market will be determined by the trader’s reaction to the pivot at $ 1954.80.
Bullish scenario
Look for a strong bullish bias as long as December Comex gold futures can stay above $ 1954.80. If this creates enough bullish momentum, expect the rally to possibly extend to the short-term 50% level at $ 1981.70, followed by the main top at $ 2001.20 and the short-term Fibonacci level at $ 2007.10.
Bearish scenario
A sustained move below $ 1954.80 will indicate the presence of sellers. This could trigger a breakout at $ 1942.20, followed by the main low at $ 1911.70.
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