Comex Gold Futures (GC) Technical Analysis – January 18, 2017 Forecast

February Comex Gold futures are trading flat as investors await the release of the U.S. consumer inflation report at 1330 GMT. The report could set the pace of future rate hikes by the Fed in 2017.

Traders expect monthly U.S. inflation to rise by 0.3%. This would put the annualized rate at 2.1%, over the Fed’s mandated 2.0% target. This would also increase the chances for a Fed rate hike as early as March.

Technical Analysis

The main trend is up according to the daily swing chart. A trade through $1218.90 will signal a resumption of the uptrend, but investors should watch the follow-through because if it occurs on low volume, the market may set up a potentially bearish closing price reversal top.

If the rally continues then the next two main top targets are $1223.50 and $1236.10.

A trade through $1187.50 will turn the minor trend down.

The main range is $1341.00 to $1124.30. Its retracement zone at $1232.70 to $1258.20 is the primary upside target. On the downside, retracement zone support comes in at $1193.40, $1180.20 and $1165.30.

Forecast

Based on the current price at $1213.50, the direction of the market today is likely to be determined by trader reaction to $1218.90. Three scenarios can occur today. Firstly, buyers could take out $1218.90 and never look back, setting their sights on $1232.70. Secondly, buyers could take out $1218.90 then break back under it, setting up a potentially bearish closing price reversal top. Finally, sellers may come in ahead of $1218.90, signaling weakness and perhaps triggering a break into at least $1193.40.

Watch the price action and read the order flow at $1218.90 all session. This will tell us if the bulls or the bears are in control.