Comex Gold Futures (GC) Technical Analysis – December 31, 2014 Forecast

February Comex Gold futures are called lower this morning ahead of the regular session opening based on the weak overnight trade. So far there has been no follow-through to the upside after yesterday’s strong surge. That move was fueled by an unexpected drop in the U.S. Dollar against most major currencies.

Based on the overnight action and the expected light trade, it looks as if the market is going to settle inside the major retracement zone bounded by $1194.10 to $1298.80. This entire range was tested on Tuesday.

On the upside, the major downtrending angle that stopped the rally on Tuesday comes in at $1179.00. On the downside, the major uptrending angle that was tested successfully five out of the last seven sessions is at $1183.70. These two angles form a triangle chart pattern which suggests traders should expect some big volatility to begin the year or at least by January 8 – 9.

The short-term range is $1239.00 to $1170.70. Its retracement zone at $1204.90 to $1212.90 straddles the major Fibonacci level at $1208.80 so this zone could prove to be strong resistance today like it was yesterday.

The Fibonacci level at $1212.90 is also a potential trigger point for an acceleration to the upside if the volume is above average today. The acceleration point to the downside is $1183.70.

If the volume is below average today then look for the market to trade sideways between $1194.10 and $1204.90 most of the session.