Comex Gold Futures (GC) Technical Analysis – August 31, 2016 Forecast

December Comex Gold prices are trading slightly better on Wednesday, mirroring the price action by the U.S. Dollar. Earlier in the session, the market inched lower towards two-month lows before reversing slightly to the positive side.

Pressuring gold prices on Tuesday was strong U.S. consumer confidence data which drove the Conference Board’s index to an 11-month high in August. The news pushed U.S. interest rates higher, making the U.S. Dollar a more attractive investment. Gold fell because it is a dollar-denominated commodity.

Later today, investors will get the opportunity to react to the latest U.S. ADP Non-Farm Employment Change report. It is expected to show the private sector added 174,000 jobs in August. Chicago PMI is expected to come in at 54.1, slightly below the previous 55.8. Pending Home Sales are expected to show a 0.7% increase.

Technically, the main trend is down according to the daily swing chart. The market is in no position to turn the main trend to up, but it is in the window of time to produce a potentially bullish closing price reversal bottom.

The main range is $1207.00 to $1384.40. Its retracement zone at $1295.50 to $1274.50 is the primary downside target.

The short-term range is $1364.30 to $1312.00. Its retracement zone at $1338.20 to $1344.30 is the primary upside target.

Based on the current price at $1318.10, the next major downside target is the uptrending angle at $1306.10. This is followed by the 50% level at $1295.50.

On the upside, the nearest target is a downtrending angle at $1332.20. Taking out this angle could generate enough upside momentum to challenge the short-term 50% level at $1338.20.

Look for volatility with the release of the ADP data at 1215 GMT. A stronger-than-expected number should help the dollar and weaken gold. A weak private payrolls number should trigger a short-covering rally in gold.