Comex Gold Futures (GC) Technical Analysis – July 27, 2016 Forecast

December Comex Gold futures nudged higher on Tuesday, supported by the weakness in the U.S. Dollar. Traders are going into the Fed report a little cautious. A hawkish Fed statement that hints at a September interest rate hike will likely weaken gold prices. A dovish Fed statement that pushes a rate hike into December or beyond could be friendly to gold. Additionally, further weakness in the U.S. equity markets may make gold a more attractive investment.

Technically, the main trend is up according to the daily swing chart. However, momentum has been trending lower since July 6. Last week’s closing price reversal bottom at $1318.50 may be signaling a shift in momentum back to up, but the chart pattern hasn’t been confirmed. It will be confirmed on a trade through $1342.00.

The major range is $1207.00 to $1384.40. Its retracement zone at $1295.70 to $1274.80 is the primary downside target. This zone is controlling the longer-term direction of the market.

The main range is $1259.10 to $1384.40. Its retracement zone at $1321.80 to $1307.00 held as support last week when the market formed the closing price reversal bottom at $1318.50.

Based on Tuesday’s close at $1328.30, the direction of the market today is likely to be determined by trader reaction to the downtrending angle at $1324.40.

A sustained move over $1324.40 will indicate the presence of buyers. This move could generate some upside momentum with the first target $1342.00. A trade through this level will confirm the reversal bottom, putting the market in a position to accelerate into the short-term retracement zone at $1351.50 to $1359.20. A downtrending angle passes through this zone at $1354.40, making it a valid upside target also.

A sustained move under $1324.40 will signal the presence of sellers. The first targets are the 50% level at $1321.80 and the closing price reversal bottom at $1318.50. Taking out this level could drive gold into the Fib level at $1307.00. This is followed by an uptrending angle at $1303.10 and the major 50% level at $1295.70.

Watch the price action and read the order flow at $1324.40. Trader reaction to this angle will tell us if the bulls or the bears are in control today.