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Gold Price Futures (GC) Technical Analysis – August 20, 2018 Forecast

By:
James Hyerczyk
Published: Aug 20, 2018, 12:08 UTC

Today’s price action is all about momentum so if it continues then we should see a move to $1204.70 to $1205.90 before sellers re-emerge. The first leg up from a prolonged move down in price and time is all short-covering. Buyers aren’t going to show up until there is a retracement of the first leg up.

Gold Chart

An easing of tensions in Turkey and optimism that the trade talks between the United States and China later this week will yield positive results may be helping to support gold futures on Monday. However, the move is likely be fueled by aggressive profit-taking and short-covering after sellers failed to take out the December 16, 2016 main bottom at $1162.00 last week.

With hedge fund and money managers holding record short positions as of August 14, the market was just ripe for a short-covering rally due to technically oversold conditions.

At 1153 GMT, December Comex Gold is trading $1193.50, up $9.30 or +0.79%. Low volume is also behind the trade. Aggressive counter-trend buyers may be taking advantage of the thin trading conditions to drive the weaker shorts out of the market.

Comex Gold
Daily December Comex Gold

Daily Technical Analysis

The main trend is down according to the daily swing chart. A trade through $1167.10 will signal a resumption of the downtrend. The market is in no position to change the main trend to up.

The main range is $1244.70 to $1167.10. If the upside momentum continues then look for a move into its retracement zone at $1205.90 to $1215.10.

Daily Technical Forecast

Based on the current price at $1193.50, the closest support is a steep uptrending Gann angle at $1183.10. This is followed by the next uptrending Gann angle at $1175.10.

If the upside momentum continues then look for a drive into the downtrending Gann angle at $1204.70. Since the main trend is down, sellers are likely to come in on a test of this angle. This is followed closely by the 50% level at $1205.90. These two prices are close enough to form a resistance cluster. We could see an acceleration to the upside if buyers can take out $1205.90 with conviction.

Today’s price action is all about momentum so if it continues then we should see a move to $1204.70 to $1205.90 before sellers re-emerge. The first leg up from a prolonged move down in price and time is all short-covering. Buyers aren’t going to show up until there is a retracement of the first leg up.

About the Author

James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.

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