Comex Gold Futures (GC) Technical Analysis – February 24, 2017 Forecast

April Comex Gold futures are trading higher shortly ahead of the regular session opening. Traders are reacting to a weaker U.S. Dollar and lower U.S. Treasury yields which are making dollar-denominated gold a more attractive investment.

Technical Analysis

The main trend is up according to the daily swing chart. The trend was reaffirmed when gold traded through the previous main top at $1246.60 on Thursday. The new main bottom is $1217.50. A trade through this bottom will turn the main trend to down.

The next major upside target is the November 9 top at $1343.90. This top was made shortly after Trump won the presidential election.

The main range is $1343.90 to $1127.20. Its retracement zone is $1235.60 to $1261.10. This zone is currently being tested. Trader reaction to this zone will determine the longer-term direction of the market. Gold is likely to strengthen on a sustained move over $1261.10 and weaken on a sustained move under $1235.60.

Forecast

Based on the current price at $1258.20, the direction of the gold market today is likely to be determined by trader reaction to the Fibonacci level at $1261.10.

Taking out $1261.10 will indicate the buying is getting stronger. This could trigger a rally into the long-term downtrending angle at $1271.90. We could see selling on the first test of the angle, but it is also the trigger point for an acceleration to the upside with the next target angle coming in at $1307.90.

The inability to overcome $1261.10 will indicate that sellers are coming in to stop the rally. If the selling is strong enough, we could see a steep break into the 50% level at $1235.60. This is followed by a short-term uptrending angle at $1229.50.

Watch the price action and read the order flow at $1261.10 the rest of the session. Trader reaction to this level will tell us if the buying is getting stronger, or if sellers are coming in to stop the rally, or perhaps take profits.