Comex Gold Futures (GC) Technical Analysis – May 6, 2016 Forecast

June Comex Gold is trading higher shortly before the release of the U.S. Non-Farm Payrolls report for April. The report is expected to show the economy added 203K jobs. The unemployment rate is expected to remain at 5.0% and Average Hourly Earnings are expected to come in unchanged at 0.3%.

Stronger than expected numbers should help underpin the U.S. Dollar which would likely pressure gold futures. Average Hourly Earnings is the key number to watch since this is an inflation indicator. A stronger headline number and a weaker Average Hourly Earnings number will produce the most volatility.

Technically, the main trend is up according to the daily swing chart. However, momentum has been to the downside all week.

The main range is $1225.40 to $1306.00. Its retracement zone at $1265.70 to $1256.20 is the primary downside target. Since the trend is up, there may be a technical bounce on a test of this zone.

The short-term range is $1306.00 to $1270.60. Its retracement zone at $1288.30 to $1292.50 is the primary upside target.

Based on yesterday’s close at $1272.30 and the earlier price action, the direction of the market today is likely to be determined by trader reaction to the downtrending angle at $1274.00.

A sustained move over $1274.00 will indicate the presence of buyers. The first major upside target is a cluster of numbers at $1288.30, $1289.40, $1290.00 and $1292.50. Because of this setup, we could see a technical bounce on the first test of this zone.

Overcoming $1292.50 will indicate the buying is getting stronger with the next two targets coming in at $1298.00 and $1302.00. The latter is the last potential resistance angle before the $1306.00 main top.

A sustained move under $1274.00 will signal the presence of sellers. The first target is yesterday’s low at $1270.60. This is followed by the major 50% level at $1265.70.

The 50% level is a trigger point for an acceleration into the uptrending angle at $1257.40 and the Fib level at $1256.20.