Comex Gold Futures (GC) Technical Analysis – October 7, 2014 Forecast

December Comex Gold futures took out the December 31, 2013 bottom at $1185.00, but buyers came in to support the market at $1183.30. Anyone that went short on the trader through $1185.00 was caught in a bear trap. These traders may have to chase the market higher if forced to cover their positions. This could trigger a strong short-covering rally.

Profit-takers may have come in at $1185.00 because a major low is often used as an exit. In addition, aggressive counter-trend buyers may have also come in to support the market. Some shorts probably covered when they saw the U.S. Dollar breaking hard.

The main support today is $1185.00, followed by yesterday’s low at $1183.30 and a monthly bottom at $1182.30. There are no major support level under these levels until the psychological $1000.00 level.

The short-term range is $1224.00 to $1183.30. The pivot price formed by this range is $1203.70. This price is controlling the short-term direction of the market. A sustained move over this level could lead to a test of the downtrending angle at $1223.50. This price forms a potential resistance cluster with the minor top at $1224.00.

Overtaking $1224.00 with conviction is likely to drive the market into the next downtrending angle at $1242.30.

The tone of the day is likely to be determined by trader reaction to the pivot at $1203.70.