Comex Gold Futures (GC) Technical Analysis – December 19, 2016 Forecast

February Comex Gold futures are called higher shortly before the regular session opening. A generally weaker U.S. Dollar and U.S. stock indices is helping to underpin the market. End of the year position-squaring and profit-taking are also helping to underpin the market.

Volume is expected to be below average because of the start of Christmas week. However, investors should be prepared for volatility spikes because of the thin trading conditions.

In the absence of heavy trading in the Treasury markets and another week of sharply higher yields, I expect to see counter-trend price action.

Technical Analysis

The main trend is down according to the daily swing chart. The market is far from turning the main trend to up, but momentum appears to be ready to shift to the upside.

The short-term range is $1190.20 to $1124.30. Its 50% level or pivot at $1157.30 is the primary upside target. Since the main trend is down, we could see a technical bounce on the first test of this level. However, this is also a trigger point for an acceleration to the upside with $1182.00 the next potential target.

Forecast

Based on the current price at $1141.30, the first upside targets are a pair of downtrending angles at $1148.10 and $1150.20.

Watch for a technical bounce on the first test of these two angles. This would indicate that sellers are still in control.

Overtaking $1150.20 could trigger an acceleration into the short-term pivot at $1157.30.

If sellers prevent the market from overtaking $1148.10 to $1150.20 then look for the market to drift sideways to lower. The next major target is last week’s low at $1124.30. This is followed by a long-term uptrending angle at $1118.30.

The direction of the market today will be determined by how traders react to a test of the pair of angles at $1148.10 and $1150.20. Basically, I’d look for a bearish tone to develop on a sustained move under $1148.10 and a bullish tone on a sustained move over $1150.20.

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