Comex Gold Futures (GC) Technical Analysis – February 9, 2016 Forecast

April Comex Gold futures extended its weekly gains on Tuesday with a breakout through its last major extreme, the October 2015 top at $1191.90. This move put the market inside a major retracement zone. Trader reaction to this zone will tell us if the market is strong enough to extend the move into the next top at $1232.30, or if investors are starting to take profits.

The main range was formed by the $1308.00 main top from the week-ending January 23, 2015 and the $1046.60 main bottom from the week-ending December 4, 2015. Its retracement zone is $1177.30 to $1208.20. This zone is currently being tested.

A long-term downtrending angle also passes through this zone at $1198.00, making it a valid upside target also. This angle provided resistance earlier in the session.

Based on the current price at $1194.00 the direction of the market the rest of the week is likely to be determined by trader reaction to the downtrending angle at $1198.00.

A sustained move under $1198.00 will indicate the presence of sellers. This could trigger a fast break into the main 50% level at $1177.30.

The daily chart begins to open up under $1177.30. This could lead to a steep sell-off since the next major target doesn’t come in until $1126.60.

Overtaking the downtrending angle at $1198.00 will signal the presence of sellers. This could generate enough upside momentum for a fast rally into a steep uptrending angle at $1206.00 and a major Fibonacci level at $1208.20.

Crossing to the strong side of the Fib level at $1208.20 will put the market in a bullish position with the next target a main top at $1232.30.

Watch the price action and read the order flow at $1198.00 the rest of the week. Trader reaction to this level will tell us if the bulls are still coming in to support the market, or if the bears are taking control.