Comex Gold Futures (GC) Technical Analysis – October 22, 2014 Forecast

December Comex Gold futures took out the major 50% level at $1253.80 briefly on Tuesday, reaching a high of $1255.60. The close was below the 50% level which was expected since this level is a normal profit-taking area. In addition, since the main trend is down on the daily chart, some aggressive shorts probably re-entered on this rally.

Gold traders are taking their cues from the U.S. Dollar and the Euro so the action in these two markets should be watched along with the price levels.

A sustained move over $1253.80 could trigger a surge to the upside since the daily chart indicates the next target is a major Fibonacci level at $1270.40, followed by a long-term downtrending angle at $1272.30.

A failure at $1253.80 will indicate that short-sellers are winning the battle for control. This could generate some downside momentum. The nearest support is a minor uptrending angle at $1242.00, followed by a major uptrending angle from the $1183.30 bottom at $1231.30.

The tone of the day will be determined by trader reaction to the major 50% level at $1253.80.