Comex Gold Futures (GC) Technical Analysis – October 1, 2014 Forecast

December Comex Gold futures inched lower on Tuesday, taking out last week’s low at $1206.60 in the process on its way to $1204.30. The last uptrending support angle on the weekly chart before the main bottom at $1185.00 comes in at $1204.50. So this was an important test.

There still hasn’t been a sign of a bottom on the daily chart, but the weak follow-through moves through the previous lows are beginning to make me think that someone is in there buying the dips. If sellers decide to show up again, this market will be at $1185.00 fairly quickly. At this time, however, it looks as if there is either a buyer coming in to defend $1200.00, or short-sellers are getting tired of selling weakness.

The new short-term range is $1237.00 to $1204.30. Its pivot price is $1220.70. Overtaking this level will be a sign that the short-covering is getting stronger. This could trigger a fast rally into the nearest downtrending angle at $1231.50.

The market opens up over $1231.50 although there is a minor top at $1237.00. The daily chart indicates there is room to the upside with a resistance cluster at $1250.30 to $1251.00 the next major upside target.

Other than a sharp sell-off in the dollar, or a completely messed up jobs report on Friday, I can’t come up with any catalyst for a rally other than a geopolitical event, or massive profit-taking by the hedge and commodity funds. The charts are telling me there is about $45.00 dollars of upside potential and $20.00 of downside potential. If there is no follow-through selling today then watch for traders to go after at least $1220.70.