Comex Gold Futures (GC) Technical Analysis – June 26, 2014 Forecast

August Comex Gold futures posted an expanded range on Wednesday with an early downside bias, but by the end of the day, the market was still trading inside a major retracement zone and poised to take out the high for the week at $1326.60. The volatility was triggered by a mixed reaction to the weak U.S. GDP data and the initial sell-off then subsequent recovery in the equities markets.

The main range is $1392.00 to $1240.20. The retracement zone formed by this range is $1316.10 to $1334.00. Since June 19, gold has been sitting inside this range as investors decide which way they want to take the market. The bulls believe prices should rise from here given the uncertainty of the global economy. Bearish traders feel equally strong about the overbought market and the lack of inflation.

A downtrending angle from the $1392.00 top comes in at $1321.00 today. Gold has straddled this angle the past two days, closing below it on Tuesday, but above it on Wednesday. This gives gold a slight upside bias today.

The angle appears to be controlling the short-term direction of the market. A sustained move over it today could trigger a rally into $1334.00. A failure to overcome this angle could lead to a break into the nearest uptrending support angle at $1314.00.

If the market is topping out then look for an acceleration to the downside when $1314.00 fails. The daily chart indicates that $1292.30 to $1284.20 is the best target and next support zone.

The tone of the day is likely to be determined by how traders react to the angle at $1321.00.