Gold Price Futures (GC) Technical Analysis – August 21, 2018 Forecast

Despite a weaker U.S. Dollar Index, gold futures are trading lower shortly after the regular session opening. The market traded higher earlier in the session, extending its three day rally. However, sellers re-emerged as the market approached Gann angle resistance and a key retracement zone. Furthermore, the dollar index hit a key support zone, which drew the attention of buyers.

At 1211 GMT, December Comex Gold is trading $1198.60, down $0.80.

Daily Technical Analysis

The main trend is down according to the daily swing chart. However, the current three day rally suggest short-covering is taking place due to oversold conditions. As of August 14, government data showed that hedge fund and money managers were sitting in record short positions. The price action may be an attempt to alleviate the downside pressure.

The main range is $1244.70 to $1167.10. Its retracement zone at $1205.90 to $1215.10 is the primary upside target. Since the main trend is down, we’re looking for short-sellers to re-emerge on a test of this zone.

If a short-term range forms between $1167.10 and $1203.10, then we could see a pullback into its retracement zone at $1185.10 to $1180.90.

Daily Technical Forecast

Based on the early price action, the direction of the December Comex Gold market the rest of the session is likely to be determined by trader reaction to the long-term downtrending Gann angle at $1202.70. This angle stopped the rally earlier in the session.

A sustained move under $1202.70 will indicate the presence of sellers. If this move creates enough downside pressure, we could see a further break into the steep uptrending Gann angle at $1191.10.

We could see counter-trend buying on the first test of $1191.10, but if it fails then look for the selling to possibly extend into the retracement zone at $1185.10 to $1180.90.

Overtaking the Gann angle at $1202.70 will signal that the buying is getting stronger. This could lead to a surge into the main 50% level at $1205.90. Watch for sellers on this move. If they fail to show up then the short-covering rally could extend into the Fibonacci level at $1215.10.