Comex Gold Futures (GC) Technical Analysis – August 26, 2014 Forecast

After consolidating for two days, following last week’s hard sell-off, December Comex Gold futures are mounting a strong rally today.

Today’s upside breakout occurred when the major Fibonacci level at $1282.10 could not hold back the buying pressure. The rally was triggered by a combination of aggressive counter-trend buying, profit-taking and short-covering. The Fib level is now new intraday support. If the selling pressure resumes later in the session then look for an eventual break into the next support at $1271.20. Based on the strong intraday momentum, however, this angle is not likely to be tested.

On the upside, the first target is a major 50% level at $1294.60. The new short-term range of $1324.30 to $1273.40 sets up the next target zone at $1298.90 to $1304.90. A downtrending angle from the $1324.30 top passes through this zone at $1300.30, making it a valid upside target.

Today’s price action suggests the market has enough upside momentum to challenge $1298.90 to $1300.30. Since the main trend is down on the daily chart, watch for sellers to re-emerge following a test of this area.