Comex Gold Futures (GC) Technical Analysis – September 28, 2016 Forecast

December Comex Gold futures are trading slightly lower shortly before the regular session opening. The market is trying to recover from early session weakness. The market doesn’t seem to be too affected by the stronger U.S., but the weaker equity markets may be helping to support it.

Today’s price action is likely to be influenced by the direction of the U.S. Dollar and the U.S. equity markets, and they are likely to react to the U.S. Durable Goods report at 1230 GMT and the series of Fed speakers today including Fed Chair Janet Yellen at 1400 GMT. Investors want to know Yellen’s views after the split FOMC vote on September 21 and get a feeling as to how close the Fed is to raising rates in December.

Several Fed speakers are also on tap to deliver their messages.  FOMC voters Mester (hawk, dissenter), George (hawk, dissenter), and James Bullard are all capable of moving the markets with their commentary. Traders should be looking for increased volatility especially if the Fed members comment on the timing of the next rate hike. FOMC Member James Bullard at 1410 GMT. European Central Bank President will also deliver a speech at 1430 GMT. The day wraps up with a late speech by FOMC Member Esther George at 2315 GMT on Wednesday.

TECHNICAL ANALYSIS

The main trend is down according to the daily swing chart. The main trend will turn up on a trade through the last main top at $1347.80. A trade through $1309.20 will signal a resumption of the downtrend.

The major retracement zone is $1321.80 to $1307.00. This zone provided support on September 1 when the market made a bottom at $1305.50 and on September 16 when gold reached a higher bottom at $1309.20.

The short-term range is $1309.20 to $1347.80. Its retracement zone is $1328.50 to $1321.80. This zone is currently being tested.

Combining the two retracement zones created a key support area at $1323.90 to $1321.80. I think that ultimately, trader reaction to this key support zone will determine the longer-term direction of the market.

FORECAST

BASED ON THE CURRENT PRICE AT $1329.30 AND THE EARLIER PRICE ACTION, THE DIRECTION OF THE DECEMBER COMEX GOLD MARKET TODAY WILL BE DETERMINED BY TRADER REACTION TO THE SHORT-TERM 50% LEVEL AT $1328.50.

A SUSTAINED MOVE OVER $1328.50 WILL GIVE GOLD AN UPSIDE BIAS TODAY. THIS COULD TRIGGER A FAST MOVE INTO THE DOWNTRENDING ANGLE AT $1331.80. THIS ANGLE IS THE TRIGGER POINT FOR AN ACCELERATION TO THE UPSIDE WITH THE NEXT TARGET ANGLE COMING IN AT $1339.80.

A SUSTAINED MOVE UNDER $1328.50 WILL INDICATE THE RETURN OF SELLERS. THE SELLING PRESSURE IS LIKELY TO BE LABORED BECAUSE OF POTENTIAL SUPPORT LEVELS AT $1325.20, $1323.90 AND $1321.80.

LOOK FOR THE RANGE TO EXPAND TO THE DOWNSIDE IF $1321.80 IS TAKEN OUT. THE NEXT TARGET ANGLE COMES IN AT $1317.20.

WATCH THE PRICE ACTION AND READ THE ORDER FLOW AT $1328.50. TRADER REACTION TO THIS LEVEL WILL DETERMINE THE DIRECTION OF THE MARKET TODAY.

LOOK FOR VOLATILITY IF THE FED SPEAKERS ARE STRONGLY HAWKISH OR DOVISH. HAWKISH TALK SHOULD BE BEARISH FOR GOLD. DOVISH TALK SHOULD BE BULLISH.