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Comex Gold Futures (GC) Technical Analysis – October 24, 2016 Forecast

By:
James Hyerczyk

December Comex Gold futures are trading slightly lower shortly before the cash market opening. The market is also trading inside Friday’s range which

comex-gold-bars

December Comex Gold futures are trading slightly lower shortly before the cash market opening. The market is also trading inside Friday’s range which indicates investor indecision and impending volatility.  Traders are watching the price action in the U.S. Dollar which is coming off of its highest level since March and in a position to form a potentially bearish closing price reversal top.

The recent price action in the gold market suggests that a December Fed rate hike may already be priced into the market. Despite the recent surge by the U.S. Dollar, gold has held up very well, trading well above the low for the month at $1243.20. Late last week, it showed signs of life, but the rally stalled at $1275.90.

Besides the movement in the U.S. Dollar today, we’ll also be watching the price action in the stock market. Lower equity prices could also be supportive for gold prices.

Technical Analysis

The main trend is down according to the daily swing chart. Although the market isn’t close to turning the main trend to up, a trade through $1275.90 could trigger a surge to the upside. This move will also negate the minor closing price reversal top.

The short-term range is $1275.90 to $1261.70. Its 50% level or pivot is $1268.80. This level is providing resistance today. Overtaking this level will give the market an upside bias today.

The intermediate range is $1243.20 to $1275.90. Its 50% level or pivot is $1259.60. This price is a support level clustered with the Brexit bottom at $1259.20.

The main range is $1347.80 to $1243.20. Its retracement zone at $1295.70 to $1307.80 is the primary upside target. This area could be reached if $1275.90 is taken out with conviction.

daily-december-comex-gold
Daily December Comex Gold

Forecast

Based on the current price at $1266.10 and the earlier price action, the direction of the market today is likely to be determined by trader reaction to the short-term pivot at $1268.80.

A sustained move over $1268.80 will signal the presence of buyers. This could fuel a rally into $1275.80. This is the trigger point for an acceleration to the upside with the next major target coming in at $1295.70.

A sustained move under $1268.80 will indicate the presence of sellers. The next support is a cluster of numbers at $1259.60, $1259.10 and $1258.10.

The daily chart opens up to the downside under $1258.10 with the next two targets $1248.80 and $1243.20.

Watch the price action and read the order flow at $1268.80 today. Trader reaction to this level will tell us if the buying is getting stronger or if the sellers are still in control.

About the Author

James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.

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