Comex Gold Futures (GC) Technical Analysis – October 31, 2014 Forecast

Overnight, the Bank of Japan announced additional stimulus, triggering a rapid rise in the U.S. Dollar at the expense of the Japanese Yen. The move also fueled a huge drop by December Comex Gold, which had already been under pressure this week due to Wednesday’s slightly hawkish U.S. Federal Reserve monetary policy statement.

Gold accelerated to the downside right after the BOJ announcement, taking out the recent main bottom at $1183.30. Although there may be a few intraday short-covering rallies or countertrend technical bounces, it looks as if this market can eventually trend lower into the low of the year into the next support angle on the monthly chart at $1024.00.

On the upside, the old bottom at $1183.30 should be new resistance and a natural selling point if this market is truly bearish. If buyers overcome this level then this will signal that the weakness was triggered by sell-stops rather than fresh shorting pressure. If this occurs then look for an additional surge into the nearest downtrending angle at $1191.60.