Comex Gold Futures (GC) Technical Analysis – February 12, 2016 Forecast

April Comex Gold futures are trading slightly lower shortly ahead of the regular session opening. The market is trading inside yesterday’s range. This indicates trader indecision or that a shift in momentum to down may be taking place. The market also opened lower, suggesting profit-taking or signaling that there are more sellers than buyers at current price levels.

Based on the early price action, the direction of the market is likely to be determined by trader reaction to the previous top from May 18, 2015 at $1232.30. Holding above this level will indicate that real buying came in to drive the market into yesterday’s high at $1263.90. Breaking below this level will indicate that the move was triggered by short-covering.

A sustained move over $1232.30 will indicate the presence of buyers. This could create enough upside momentum to drive the market into yesterday’s high at $1263.90. This is followed closely by a steep uptrending angle at $1268.50.

Crossing to the strong side of the angle at $1268.50 will put gold in an extremely bullish position.

The daily chart begins to open up on a sustained move under $1232.30. This could trigger an acceleration to the downside with the next targets coming in at $1188.50 and $1186.20.

Based on the current chart pattern, it’s not going to take much to drive this market back into the retracement zone at $1186.20 to $1167.90.

Fundamentally, the market is being influenced by the direction of the U.S. Dollar. I believe the market has fully priced-in the notion that the Fed won’t raise rates in 2016. Therefore, any weak U.S. economic news will likely produce limited gains. However, stronger than expected U.S. data could trigger sharp breaks. Today’s U.S. retail sales report could be a market moving event if it comes out better-than-expected.

Watch the price action and read the order flow at $1232.30 today. Trader reaction to this level will tell us if the bulls or the bears are in control.