Gold Fundamental Forecast – October 28, 2016

Gold futures continued to trade sideways on Thursday but the market did manage to post a slight gain despite the rebound rally by the U.S. Dollar, Underpinning the market was festival buying in India and increased physical demand from Asia.

December Comex Gold futures finished the session at $1269.50, up $2.90 or +0.23%.

Traders seemed content with holding gold prices in a range with support coming from a weaker stock market and resistance being fueled by a stronger dollar.

Forecast

It hard to determine the news event or key shift in fundamentals that will trigger the next volatile reaction by gold, or even the direction of the move, but the chart pattern suggests one is coming.

The market is currently being held hostage by next week’s FOMC meeting and the U.S. presidential election so it is possible that this price action will remain subdued for another ten days or so.

On Friday, traders will get the opportunity to react to the latest data on Advance GDP. It is expected to show the economy grew by 2.5 percent.

Minor reports included the Advance GDP Price Index and the Employment Cost Index. The Revised University of Michigan Consumer Sentiment report is expected to come in at 88.2, up slightly from 87.9.

The longer gold remains rangebound, the more influence the chart pattern will have on the price action and direction of gold prices. The trigger point for a breakout to the upside is $1277.50 with $1295.70 the next potential target. The acceleration point for possible price collapse is $1260.10 with the first target the main bottom at $1243.20.