Comex Gold Futures (GC) Technical Analysis – May 1, 2017 Forecast

After selling off early last week, June Comex Gold futures consolidated for a few days before closing higher on Friday. The early selling was related to the shedding of safe haven assets and greater demand for higher-yielding assets. Gold actually reached its low for the week at $1260.70 on the same day that the Trump administration announced its tax reform plan and the stock market reached its high for the week.

After a week of easing tensions, things got riled up again in North Korea after another missile launch attempt failed. Basically the North Koreans thumbed their nose at Trump and insulted China. At this time, the two countries may be considering more sanctions as well as military action. Based on the action over the week-end, I think we could see renewed safe haven buying on Monday.

Technical Analysis

The main trend is up according to the daily swing chart, however, momentum has been trending lower since the $1297.40 top on April 17.

A trade through $1248.20 will signal a resumption of the selling with the next target a main bottom at $1248.20.

Gold is also straddling a number of retracement levels. These levels are making it difficult for the market to move.

On the downside, support levels are $1267.00 and $1262.90. The daily chart opens up under $1262.90 with the next major target a 50% level at $1247.70.

On the upside, two short-term resistance levels come in at $1269.40 and $1272.80. The daily chart opens to the upside over $1272.80 with the next targets at $1279.10 and $1283.40.

Forecast

Based on Friday’s close at $1269.50 and last week’s price action, the direction of the gold market is likely to be determined by trader reaction to the long-term uptrending angle at $1268.00.

A sustained move over $1268.00 will signal the presence of buyers. If they can chew through the retracement levels then look for a move into the downtrending angle at $1277.40. This is followed by another downtrending angle at $1287.40. This is the last potential resistance angle before the $1297.40 main top.

A sustained move under $1268.00 will indicate the presence of sellers. Once the sellers take out $1260.70, it should be smooth sailing into $1248.20 to $1247.70.

The retracement levels are just there to provide interference, the main number to watch is $1268.00. Trader reaction to this angle will tell us if the buyers have returned, or if sellers are increasing their presence.