Comex Gold Futures (GC) Technical Analysis – May 11, 2016 Forecast

June Comex Gold futures are recovering early in the session despite a firm U.S. Dollar and equity markets. A successful test of a key retracement zone may be behind the buying or it could be aggressive buyers anticipating a setback in the U.S. Dollar after a five day rally.

Technically, the main trend is up according to the daily swing chart, however, momentum has been to the downside since the $1306.00 main top on May 2.

The main range is $1225.40 to $1306.00. Its retracement zone at $1265.70 to $1256.20 was the primary downside target. This zone was tested successfully on Tuesday at $1258.30. Helping to provide support inside the zone was an uptrending angle from the $1225.40 main bottom. Gold is trading on the strong side of the retracement zone early in the session, giving it an upside bias.

The short-term range is $1306.00 to $1258.30. Its retracement zone at $1282.20 to $1278.80 is the primary upside target. Sellers are going to try to produce a secondary lower top inside this zone. Buyers are going to try to take it out and make $1258.30 a new main bottom.

Based on Tuesday’s close at $1264.80, the direction of the market today is likely to be determined by trader reaction to the 50% level at $1265.70.

A sustained move over $1265.70 will indicate the presence of buyers. This could create enough upside momentum to challenge the nearest downtrending angle at $1278.00.

Taking out $1278.00 should eventually lead to a test of the short-term retracement zone at $1282.20 to $1287.80. This zone is followed by a downtrending angle at $1292.00.

A sustained move under $1275.70 will signal the presence of sellers. The first target is an uptrending angle at $1263.40. The daily chart opens up to the downside under this angle with potential targets at $1258.30 and $1256.20. These are followed by a long-term uptrending angle at $1252.00.

Look for a bullish tone today as long as gold can hold over $1265.70. It may get support if the U.S. Dollar begins to weaken.