Comex Gold Futures (GC) Technical Analysis – October 20, 2016 Forecast

December Comex Gold futures are trading slightly higher shortly before the regular session opening. Today’s price action is expected to be influenced by the European Central Bank decision and the direction of U.S. Treasury yields.

An ECB decision that weakens the U.S. Dollar should help underpin gold. A decision that strengthens the dollar should pressure gold futures.

Treasury yields have been falling this week because of lowered expectations for a Fed rate hike in December. If the chances of a rate hike continue to decline then gold has a good chance to rally over the near-term.

Technical Analysis

The main trend is down according to the daily swing chart, but momentum is pointing up. Falling back below the previous high t $1267.60 will shift momentum back to the downside.

Overtaking the main Fib level at $1274.80 will indicate the upside momentum is increasing. This could generate enough upside momentum to challenge the main 50% level at $1295.70.

Forecast

Based on the current price at $1270.90 and the early price action, the direction of the market today is likely to be determined by trader reaction to the main Fib at $1274.80.

A sustained move under $1274.80 will indicate the presence of sellers. This could lead to a test of the downtrending angle at $1267.80.

Crossing to the weak side of the angle at $1267.80 will indicate the selling pressure is getting stronger. This could lead to a test of potential targets at $1259.10 and $1257.20. The latter is the last key support before an uptrending angle $1247.70 and a key low at $1243.20.

A sustained move over $1274.80 will send out a bullish signal. This is a potential trigger point for an upside breakout into the next major 50% target at $1295.70.

Basically, look for a strong upside bias on a sustained move over $1274.80 and a bearish bias on a sustained move under $1267.80.