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

By:
James Hyerczyk
Updated: Sep 27, 2016, 11:32 UTC

December Comex Gold futures are trading lower shortly before the regular session opening. A stronger U.S. Dollar and increased demand for risky assets is

comex-gold-bars

December Comex Gold futures are trading lower shortly before the regular session opening. A stronger U.S. Dollar and increased demand for risky assets is helping to pressure prices. These two factors are likely to control the direction of the gold market the rest of the session.

Gold is currently trading inside an elongated triangle chart pattern. This suggests impending volatility, but the chart pattern is going to need a few more days to develop. Translation:  there is a big move coming in the gold market and if stocks surge to the upside then the big move in gold will be to the downside.

If you look at the recent price action, it appears to be telling us that nobody wants to own gold because it doesn’t pay a yield. If you’re a contrarian thinker, however, then you’re probably looking at the upside since hedge funds are basically short.

TECHNICAL ANALYSIS

daily-december-comex-gold
Daily December Comex Gold

The main trend is down according to the daily swing chart. The trend will turn up on a trade through $1357.60. A move through $1309.20 will turn the main trend to down. Momentum shifted to the upside on September 21.

The main range is $1259.10 to $1384.40. Its retracement zone at $1321.80 to $1307.00 is the primary upside target. This zone provided support at $1309.20 on September 16 and at $1305.50 on September 1. This zone is very important to the longer-term structure of the market. Since gold is trading above it, I have to give gold a slight upside bias at this time.

FORECAST

BASED ON THE CURRENT PRICE AT $1339.50 AND THE EARLY PRICE ACTION, THE DIRECTION OF THE DECEMBER COMEX GOLD MARKET TODAY IS LIKELY TO BE DETERMINED BY TRADER REACTION TO THE UPTRENDING ANGLE AT $1337.20.

A SUSTAINED MOVE OVER $1337.20 WILL INDICATE THAT BUYERS ARE STILL COMING IN TO SUPPORT THE MARKET. THIS COULD TRIGGER A RALLY INTO A PAIR OF ANGLES AT $1349.80 AND $1355.20. THESE ARE THE LAST TWO POTENTIAL RESISTANCE ANGLES BEFORE THE $1357.60 MAIN TOP.

A SUSTAINED MOVE UNDER $1337.20 WILL SIGNAL THE PRESENCE OF SELLERS. THIS COULD LEAD TO A QUICK BREAK INTO A DOWNTRENDING ANGLE AT $1335.30. CROSSING TO THE WEAK SIDE OF THIS ANGLE WILL PUT GOLD IN A BEARISH POSITION WITH THE NEXT TARGET ANGLES $1324.10 AND $1323.20.

WATCH THE PRICE ACTION AND READ THE ORDER FLOW AT $1337.20 TODAY. TRADER REACTION TO THIS ANGLE WILL SET THE TONE FOR THE REST OF THE DAY.

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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