Gold Price Futures (GC) Technical Analysis – June 27, 2017 Forecast
August Comex gold futures are trading higher shortly before the regular session opening. After hitting a six-week low on Monday on a fluke trade, the market is being driven higher today by bargain hunters and a weaker U.S. Dollar.
The dollar is down against a basket of currencies, led by a surge in the Euro. The single currency is being supported by hawkish comments from European Central Bank President Mario Draghi. The EUR/USD surged to its highest level in over a week after Draghi said factors weighing on inflation in the Euro Zone were mainly temporary and the ECB could look through them.
Draghi also said he saw a recovery in the Euro Zone economy and that deflationary forces had been replaced with inflationary ones, but added that stimulus in the form of the ECB’s monetary support was still needed. The surge in the Euro, however, suggests the central bank may be getting ready to begin reducing stimulus and this is bullish for the Euro.
The main trend is down according to the daily swing chart, but today’s rebound rally after yesterday’s “accidental” sell-off has put gold in a position to challenge its recent main top at $1260.00. Taking out this top will change the main trend to up. Taking out $1236.50 will signal a resumption of the downtrend with $1217.80 the next target bottom.
The main range is $1217.80 to $1298.80. Its retracement zone is $1258.30 to $1248.70. This zone is controlling the longer-term direction of the market. Gold is currently trading inside this zone.
The short-term range is $1298.80 to $1236.50. If the rally gains traction then its retracement zone at $1267.70 to $1275.00 will become the primary upside target.
Based on the current price at $1250.40 and the earlier price action, I’m looking for a surge to the upside if buyers can overcome the uptrending angle at $1251.80 and a spike to the downside if $1248.70 fails as support.
A sustained move over $1251.80 will indicate the presence of buyers. This could trigger a surge into $1258.30, followed by $1260.00. Taking out the top could trigger an acceleration into the main 50% level at $1267.70, followed by the downtrending angle at $1268.80.
Crossing back below the main Fibonacci level at $1248.70 will signal the presence of sellers. If sellers come in hard, we could see a retest of yesterday’s low at $1236.50, followed by an uptrending angle at $1234.80.
Look for volatility today with FOMC Member Patrick Harker scheduled to speak at 1515 GMT and Fed Chair Janet Yellen scheduled to deliver remarks at 1700 GMT. Both could move gold if they make comments on monetary policy that move the U.S. Dollar. Hawkish comments will be bearish for gold. Dovish comments will be bullish for gold.