Comex Gold Price Futures (GC) Technical Analysis – May 22, 2017 Forecast

June Comex Gold futures are trading slightly lower after an early session rally failed to draw the attention of enough buyers to sustain the move. The market is also trading inside its May 18 range for a second day, suggesting investor indecision and impending volatility.

On May 18, gold formed a potentially bearish closing price reversal top. A trade through $1245.70 will confirm the chart pattern. This could trigger the start of a 2 to 3 day correction.

Gold is likely to be underpinned by lower equity markets and a weaker dollar. Another surge in the stock market could put pressure on gold prices.

Technical Analysis

The main trend is down according to the daily swing chart. The market is up nine days from its recent bottom at $1214.30, but I can’t say that momentum has turned higher. All we’ve seen is a normal 50% to 61.8% retracement of its last break.

A trade through $1265.00 will negate the closing price reversal top. A trade through $1245.70 will confirm the closing price reversal top.

The main range is $1297.40 to $1214.30. Its retracement zone is $1255.90 to $1265.70. This zone provided resistance last week when the rally stopped at $1265.00. It is controlling the near-term direction of the market.

The short-term range is $1214.30 to $1265.00. Its retracement zone at $1239.70 to $1233.70 is the primary downside target.

Forecast

Based on Friday’s close at $1253.60 and the earlier price action, the direction of the gold market today is likely to be determined by trader reaction to the main 50% level at $1255.90.

A sustained move over $1255.90 will signal the presence of buyers. If the buying volume is strong enough, we could see an acceleration to the upside with the next targets $1265.00 and $1265.70. Overtaking this area could trigger a surge into the downtrending angle at $1272.90.

A sustained move under $1255.90 will indicate the presence of sellers. This could drive gold into the uptrending angle at $1250.30. This angle has guided the market higher for 9 sessions. We could see a technical bounce on the first test of this angle, but if it fails, watch for a break into $1247.40 then $1239.70.

Essentially, look for an upside bias to develop on a sustained move over $1255.90 and a downside bias to develop on a sustained move under $1250.30.