Comex Gold Futures (GC) Technical Analysis – July 5, 2016 Forecast

August Comex Gold futures are trading up from Friday’s close. The strong finish last week has put the market in a position to challenge last month’s high at $1362.60. The market should be underpinned today by lower stock prices and a weaker British Pound.

Buying picked up some after the Bank of England warned on Tuesday of “challenging” risks to financial stability following the vote for Brexit as it released 150 billion Pounds of lending to households and businesses by relaxing regulatory requirements on the banking sector.

As it published its twice-yearly report, the Bank said the risks it had feared ahead of the Brexit poll had started to materialize, with Sterling plunging to 31-year lows and the shares of banks falling by 20%.

“The current outlook for UK financial stability is challenging,” the Bank said in its financial stability report.

Based on the current price at $1349.80, the next upside target is a downtrending angle at $1356.60. This is the last potential resistance angle before the $1362.60 main top. Taking out the top will signal a resumption of the uptrend. This could create enough upside momentum to challenge a steep uptrending angle at $1364.80.

Overcoming $1364.80 will put the market in a bullish position, putting gold on course to challenge $1392.00 by July 6 to July 7.

A failure to overcome $1356.60 will indicate the presence of sellers. Crossing to the weak side of the downtrending angle at $1350.60 will mean the selling pressure is strengthening. This could trigger a break into $1338.60. This is the trigger point for the start of a steep break with $1307.70 the next target.

Look for a bullish tone to develop on a sustained move over $1356.60 and a weaker tone on a sustained move under $1350.60.