Gold Price Futures (GC) Technical Analysis – August 13, 2018 Forecast

A stronger U.S. Dollar helped drive December Comex gold futures to a multi-year low earlier in the session. There is no major support until $1162.00 so unless this market posts a dramatic reversal to the upside today, we could be headed in that direction. Furthermore, hedge fund and money managers don’t seem to be too shy about selling weakness at current price levels despite building a record net short position.

Daily Technical Analysis

The main trend is down according to the daily swing chart. The downtrend was reaffirmed earlier today when sellers took out the previous main bottom at $1212.50. This old bottom is new resistance.

Today’s session begins with the market down 14 days from the last main top at $1244.70. This puts it inside the window of time for a closing price reversal bottom. We’ve seen this chart pattern form on July 31 and August 3, but it was never confirmed with follow-through buying. Most of the time it fuels a 2 to 3 day counter-trend rally, but sometimes it just indicates the buying is temporarily greater than the selling.

Daily Technical Forecast

Based on the early price action, the direction of the December Comex gold futures contract the rest of the session is likely to be determined by trader reaction to the short-term downtrending Gann angle at $1214.70.

A sustained move under $1214.70 will indicate the presence of sellers. This Gann angle, moving down at a rate of $2.00 per day since the $1244.70 main top, has been guiding the market lower for 15 sessions or since July 23. Overtaking it may indicate a shift in investor sentiment.

If the selling pressure continues today through $1202.00 then don’t be surprised by an acceleration to the downside since the next major target is $1162.00.

Crossing to the strong side of the angle at $1214.70 will signal the presence of buyers. Overtaking $1219.00 will turn gold higher for the session. This will indicate the short-covering is getting stronger. This could lead to a move into a pair of downtrending Gann angles at $1228.20 and $1229.70.