Comex Gold Futures (GC) Technical Analysis – May 8, 2017 Forecast

June Comex Gold futures opened lower in response to the French presidential election. However, there wasn’t much of a follow-through move to the downside because almost everyone knew the move was coming since the outcome of the election was pretty much determined about two weeks ago. The market was basically set up for a “sell the rumor, buy the fact” situation.

Technical Analysis

The main trend is down according to the daily swing chart. The market is far from turning the main trend to up, however, it is in the window of time for a potentially bullish closing price reversal bottom.

Today’s session begins with gold down 15 sessions from the last main top. We’ve already had our prolonged move down in terms of price and time and our lower-low, now all we need is a higher close and a close above the opening to give us our closing price reversal bottom.

If we get the reversal today and a confirmation on Tuesday then given the short-term range of $1297.40 to $1221.00, we could see a 2 to 3 day rally back to at least $1259.20 to $1268.20.

The main range is $1198.00 to $1297.40. Its retracement zone at $1236.00 to $1247.70 should be considered resistance.

Forecast

Based on the current price at $1229.70 and today’s intraday low at $1221.00, the nearest support angle is $1218.00. If sellers take out this angle then look for the move to continue into the next angle at $1208.00. This is the last potential support angle before the $1198.00 main bottom.

On the upside, resistance is clustered at $1236.00, $1237.40 and $1238.00. Since the main trend is down, we could see sellers on the first test of this area. However, be prepared for an acceleration to the upside if buyers take out $1238.00 with conviction.

The angle at $1238.00 is the trigger point for a spike to the upside with the next target the main 50% level at $1247.70. This is another trigger point for a potential surge into $1259.20.

Since the market is currently in a position to reverse to the upside and momentum appears to be ready to shift in the same direction, we think it’s very important to watch the price action and read the order flow at $1236.00 to $1238.00. Trader reaction to this area will likely determine the direction of the gold market the rest of the session.