Comex Gold Futures (GC) Technical Analysis – May 2, 2016 Forecast

June Comex Gold futures are trading higher shortly before the regular session opening. Gold initially rallied on global stock market weakness, but is now being supported by a weaker U.S. Dollar.

Technically, the main trend is up according to the daily swing chart. The uptrend was reaffirmed on April 29 when the market traded through the March 11 top at $1287.80. This price is new support.

The current upside momentum could drive the market into the January 22, 2015 main top at $1309.00. This price could act as resistance on the initial test of this level, but look for an acceleration to the upside to $1326.40 if it is taken out with conviction.

The same goes for $1326.40. The next upside target over this level is the July 10, 2014 main top at $1350.20.

Today is the 12^th day up from the last main bottom so the market is in the window of time for a potential closing price reversal top. The market is also making a vertical move which means aggressive speculators are entering the market. This could easily drive the market into overbought territory, leading to a short-term correction.

Since the upside momentum is so strong, it makes no sense to try to pick a top. However, you still have to watch for signs of topping action such as an intraday “M” formation on the 15-minute or 60-minute chart. The order flow will also tell us if a top is forming because offers will start to pile up above the market.