Gold Price Futures (GC) Technical Analysis – December 13, 2017 Forecast

February Comex Gold futures are trading unchanged after giving up earlier gains ahead of today’s U.S. consumer inflation report and the Fed’s interest rate decision and monetary policy statement.

At 1330 GMT, investors will get the opportunity to react to the latest U.S. consumer inflation data. It is expected to show an increase of 0.4%. Core CPI is expected to rise 0.2%. On Tuesday, the U.S. reported that producer price data for November rose 0.4 percent. This met expectations. From a year ago, the producer price index shot up 3.1 percent, the biggest gain since January 2012 and followed a 2.8 percent rise in October.

If U.S. consumer price data shows a similar uptick, that could fuel expectations of faster Fed rate hikes in 2018. Gold could plunge on this news. A lower number will be bullish for gold.

The U.S. Federal Reserve has raised its benchmark interest rate two times so far this year and analysts say a third rate hike is almost certain, by 25 basis points to between 1.25 and 1.50 percent, at the conclusion of its two-day meeting at 1900 GMT.

With the rate hike a given, gold traders will be primarily focused on the U.S. central bank’s statement for clues on any further rate increases in 2018. Earlier in the year, the Fed forecast as many as three rate hikes, but concerns over sluggish inflation has led some Fed officials to lower their projections to only two rate hikes. A cut in the number of rate hikes in 2018 could underpin gold prices later today.

Daily Technical Analysis

The main trend is down according to the daily swing chart. However, the market is also in the window of time for a potentially bullish closing price reversal bottom.

A trade through $1238.30 will signal a resumption of the downtrend. This could lead to a test of the July 14 bottom at $1225.10 and the July 10 bottom at $1214.50.

Daily Technical Forecast

Based on the early trade, the direction of the gold market today is likely to be determined by trader reaction to the uptrending Gann angle at $1242.00.

Holding above $1242.00 will indicate the presence of buyers. This could create the upside momentum needed to challenge a steep downtrending Gann angle at $1255.40. This is also the trigger point for a possible acceleration into $1269.60 to $1272.30.

A sustained move under $1242.00 will signal the presence of sellers. This could trigger an acceleration to the downside with potential targets at $1225.10 and $1214.50.