Comex Gold Futures (GC) Technical Analysis – August 11, 2015 Forecast

December Comex Gold “technically” broke out of its ten day trading range without much fanfare on Monday. The move, however, wasn’t even strong enough to maintain a close above this level. This gives us an idea of how actually strong the buying is at current price levels. It also suggests that the breakout was likely fueled by buy stops rather than aggressive buying.

The catalyst behind Monday’s rally was a steep drop in the U.S. Dollar, fueled by comments from a Fed official regarding the timing of the central bank’s first rate hike in over nine years. Gold could continue to rally if the weakness in the dollar continues.

Earlier in today’s session, the People’s Bank of China devalued the Yuan. This led to some flight to safety buying into the dollar, but the move wasn’t enough to shake up gold investors. Based on the reaction by the gold market, it looks as if the news could create volatile, two-sided trading conditions today.

The nearest support angle comes in at $1097.70. This angle was broken earlier in the session, but quickly recovered. The next support angle comes in at $1085.70. The last potential support angle before the $1073.70 main bottom is at $1079.70.

If sellers come back in strong enough to drive gold through the main bottom at $1073.70 then look for the move to extend into a steep downtrending angle at least $1059.30 over the near-term.

A sustained move over $1097.70 will signal the presence of buyers. The daily chart indicates there is room to the upside with the next target a steep uptrending angle at $1121.70. The next target is a downtrending angle at $1133.30.

The main range is $1207.30 to $1073.70. If the buying continues then its retracement zone at $1140.50 to $1156.20 becomes its primary upside target.

Keep in mind that the market is no changing trend. This is just a shift in momentum triggered by position-squaring.

The direction of the market all session will be determined by trader reaction to the angle at $1097.70.