Comex Gold Futures (GC) Technical Analysis – May 3, 2016 Forecast

June Comex Gold futures are surprisingly trading flat despite another steep drop in the U.S. Dollar and sharply lower U.S. stock indices. The money that is leaving the stock indices appears to be flowing into the Japanese Yen and Euro.

If stocks continue to break sharply during the regular session and gold traders react by the book, we could see an attempt to breakout over the January 22, 2015 top at $1309.00. If the upside momentum continues on this move then the rally could extend into the August 14, 2014 top at $1326.40.

The inability to take out $1309.00 with conviction will be a sign that the market is overbought and may have to correct to attract fresh buyers. This could lead to a test of the former top at $1287.80.

The best support angle today comes in at $1277.40. A test of this angle is likely to attract buyers, but if it fails then look for the selling to extend into perhaps $1251.40.

Overall, I’m bullish gold because of the strong momentum and uptrend, however, the market is not responding to the weakness in the dollar and the stock indices and that’s a concern at the moment.

Currently, the market is trading at $1295.60. This is not the best price to begin initiating new positions especially since there is no volatility. In this case, we have to wait to buy strength on a strong move through $1309.00 or wait for a pullback into a short-term value area like $1287.80 or $1277.40.

Continue to monitor the price action and order flow until we can figure out which side the money is flowing to.