Comex Gold Futures (GC) Technical Analysis – August 7, 2015 Forecast

Two weeks of consolidation have set up December Comex Gold futures for a powerful breakout. The direction of the move will likely be determined by today’s U.S. Non-Farm Payrolls report, due to be released at 8:30 a.m. ET.

Traders expect the report to show the economy added 222K new jobs in July. A number substantially higher will likely trigger a strong rally by the U.S. Dollar and a subsequent sell-off by gold futures. A number substantially lower will likely fuel a strong short-covering rally.

The main trend is down according to the daily swing chart. The short-term range is $1073.70 to $1104.90. Its 50% or pivot is $1089.30. Trader reaction to this number will likely determine the direction of the market. Currently, gold is trading on the strong side of this number, giving the market a slight upside bias into the jobs number.

A sustained move over $1089.30 will signal the presence of buyers. Overtaking the uptrending angle at $1093.70 will indicate that the buying is getting stronger. This may create enough upside momentum to trigger a rally into the next uptrending angle at $1113.70.

The daily chart opens up further over $1113.70 with the next target a downtrending angle at $1137.30.

The main trend is $1207.30 to $1073.70. Its retracement zone at $1140.50 to $1156.30 is the primary upside target today.

On the downside, the first sign of weakness is a short-term pivot at $1089.30. The next targets are minor uptrending angles at $1083.70 and $1078.70. The latter is the last major angle before the $1073.70 main bottom.

Taking out $1073.70 will trigger a resumption of the downtrend. The first target is a steep downtrending angle at $1067.30. Crossing to the weak side of this angle will put gold in an extremely bearish position with $1000.00 the next likely downside target.

Be prepared for increased volatility today with the release of the jobs report at 8:30 a.m. ET. Look for a big move today with the direction determined by the Non-Farm Payrolls report.