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

Rising U.S. Treasury yields helped boost the U.S. Dollar on Wednesday, triggering another steep break by the February Comex Gold futures contract. The catalyst behind the spike in Treasury yields was a rally by crude oil which sparked inflation concerns. Oil rose after OPEC agreed on a deal to cut production.

Technically, the main trend is down according to the daily swing chart. A trade through $1223.50 will turn the main trend to up according to the daily swing chart.

The main range was formed by the December 17, 2015 bottom at $1055.20 and the July 6, 2016 top at $1387.10. Its retracement zone is $1182.00 to $1221.20.

The market is currently trading below this retracement zone which puts it in a weak long-term position. Traders should treat this zone like resistance.

Based on the current price at $1171.90, the direction of the gold market today is likely to be determined by trader reaction to the Fibonacci level at $1182.00.

A sustained move under $1182.00 will indicate the presence of sellers. The daily chart is wide open to the downside with the next potential downside targets coming in at $1076.60, $1065.50 and $1055.20.

Regaining the Fib level at $1182.00 will signal the presence of buyers. A sustained move over this level could trigger a strong short-covering rally.

Watch the price action and read the order flow on a test of $1182.00 today and over the near-term. If gold buyers can’t recapture this level then look for a gradual decline into the next support area. This is about $100 lower.

I won’t get excited about a rally unless big buying volume comes in over $1223.50.

Gold Fundamental Forecast