Comex Gold Futures (GC) Technical Analysis – August 1, 2016 Forecast

December Comex Gold futures are trading slightly lower shortly before the regular session opening. There was no follow-through to the upside after Friday’s surge was fueled by the release of weaker-than-expected U.S. second quarter GDP data. The market was also supported last week by the Fed’s inability to pinpoint the timing of its next interest rate hike.

The main trend is up according to the daily swing chart. Buyers are trying to establish the importance of the new secondary higher bottom at $1318.50. Sellers are trying to establish a potentially bearish secondary lower top.

The main range is $1259.10 to $1384.40. Its retracement zone at $1321.80 to $1307.00 became important support when it stopped the recent sell-off at $1318.50 on July 21.

The intermediate range is $1384.40 to $1318.50. Its retracement zone at $1351.50 to $1359.20 is the primary upside target. Trader reaction to this zone will tell us if the buying is getting stronger or if sellers are setting up a potentially bearish secondary lower top. It is currently being tested.

The new short-term range is $1318.50 to $1362.00. Its retracement zone at $1340.30 to $1335.10 is the primary downside target today.

Based on Friday’s close at $1357.50 and the earlier price action, the direction of the market is likely to be determined by trader reaction to the Fib level at $1359.20 and the 50% level at $1351.50.

A sustained move over the Fib level will indicate the presence of buyers. This may generate enough upside momentum to take out last week’s high at $1362.00. This is followed closely by the downtrending angle at $1366.40. This angle is the trigger point for an acceleration to the upside with the next major angle coming in at $1375.40. This is the last potential resistance angle before the $1384.40 main top.

A sustained move under the 50% level at $1351.50 will signal the presence of sellers. Taking out this level will likely lead to a break into the next uptrending angle at $1346.50. This is the trigger point for an acceleration into $1340.30 to $1335.10.

Look for an upside bias to develop today on a sustained move over $1359.20 and a downside bias to develop on a sustained move under $1351.50.