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James Hyerczyk
Comex Gold

Gold futures are inching higher at the mid-session after recovering from earlier weakness. The price action indicates that buyers found value once again inside a major retracement zone. Furthermore, buyers came in ahead of a pair of bottoms.

The market just hit a new high for the week as the Dow Jones Industrial Average turned lower for the session. Treasury yields are higher today as well as the U.S. Dollar Index. The price action today indicates that traders are looking at gold as an investment today rather than a hedge against uncertainty.

At 15:08 GMT, August Comex gold is trading $1292.50, up $6.20 or +0.48%.

Daily August Comex Gold

Daily Technical Analysis

The main trend is up according to the daily swing chart. However, momentum has been trending lower since the formation of the closing price reversal top at $1310.10 on May 14.

A trade through $1274.60 will change the main trend to down. A move through $1310.10 will signal a resumption of the uptrend.

The major support is a retracement zone at $1280.80 to $1261.70. This zone stopped the selling at $1273.20 on May 2 and at $1274.60 on May 21. Today’s low at $1279.20 was also inside this zone.

The short-term range is $1310.10 to $1274.60. Its retracement zone at $1292.40 to $1296.50 is resistance. It is currently being tested. Sellers are going to try to stop the rally inside this zone in an effort to form a secondary lower top. Buyers are going to try to take out $1206.50.

The major resistance is the 50% level at $1307.70.


Daily Technical Forecast

Based on the current price at $1292.50, the direction of the August Comex gold futures contract the rest of the session is likely to be determined by trader reaction to the 50% level at $1292.40.

Bullish Scenario

A sustained move over $1292.40 will indicate the presence of buyers. If this move creates enough upside momentum then look for the rally to extend into the Fibonacci level at $1296.50. Taking out this level will mean the buying is getting stronger. This could lead to a test of the downtrending Gann angle at $1299.10. This angle is the trigger point for an acceleration to the upside.

Bearish Scenario

A sustained move under $1292.40 will signal the presence of sellers. This will indicate that sellers are defending the retracement zone. This could trigger a pullback into the uptrending Gann angle at $1286.60. If this angle fails as support then look for the selling to possible extend into the support cluster at $1280.80 to $1280.60.

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