Gold prices are lower late Friday in choppy trading, with gains capped by a firm dollar. Nonetheless, bullion remained on track for its biggest weekly rise in eight weeks as U.S. President Donald Trump’s coronavirus positive test hurt risk sentiment.
Prices were on course to rise 2.3% this week, which would be the biggest weekly percentage increase since early August. Although gold jumped to a one week high after Trump initially tweeted his condition, gains were limited as the dollar too benefited from safe-haven inflows.
In other news, gold was underpinned by a weaker than expected non-farm payrolls report on the notion that it could encourage lawmakers to more faster toward a fiscal stimulus deal.
The main trend is down according to the daily swing chart, however, momentum is trending higher. A trade through $1851.00 will signal a resumption of the downtrend. The main trend changes to up on a move through $1983.80. The main range is $1690.10 to $2089.20.
Its retracement zone at $1889.70 to $1842.60 is support. The minor range is $1983.80 to $1851.00. Its 50% level at $1917.40 is resistance. This level stopped the buying on Friday. The short-term range is $2089.20 to $1851.00. Its retracement zone at $1970.10 to $1998.20 is the primary upside target.
The price action the last four sessions indicates that the direction of the next move is likely to be determined by trader reaction to $1889.70 and $1917.40. The sideways price action suggests the next move will be headline driven.
These are critical levels because both could trigger accelerations since there is room to the upside and the downside to run. A sustained move over $1917.40 could trigger an acceleration to the upside with $1970.10 a potential upside target. A sustained move under $1889.70 could lead to an acceleration to the downside with the next likely target $1851.00 to $1842.60.