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Gold Price Futures (GC) Technical Analysis – November 1, 2018 Forecast

Based on the early price action and the chart pattern, the rally may have run its course on Thursday. The direction of the market into the close is likely to be determined by trader reaction to the major Fibonacci level at $1235.80.
James Hyerczyk
Comex Gold
Comex Gold

Gold futures surged nearly $20 on Thursday after a turnaround in the Euro drove the U.S. Dollar Index sharply lower. The weaker dollar helped make dollar-denominated gold more attractive to foreign buyers. Gold buyers showed little concern about expectations of higher interest rates or tomorrow’s U.S. Non-Farm Payrolls report that could set the tone for future rate hikes.

At 1256 GMT, December Comex Gold futures are trading $1235.90, up $20.80 or +1.70%.

Daily December Comex Gold

Daily Technical Analysis

The main trend is up according to the daily swing chart. A trade through $1246.00 will signal a resumption of the uptrend.

The minor trend is also up. Thursday’s price action made $1213.40 a new minor bottom. A trade through this level will change the minor trend to down and shift momentum to the downside.

The main range is $1184.30 to $1246.00. Its retracement zone at $1215.40 to $1207.90 is support. This zone stopped the selling on Wednesday at $1213.40.

The short-term range is $1246.00 to $1213.40. Its retracement zone at $1229.70 to $1233.60 is currently being tested. This is a critical area because aggressive counter-trend sellers may step in to try to form a secondary lower top. Trend traders are going to try to take out this zone in an effort to make $1213.40 an important main bottom.

The market is also trading inside a longer-term retracement zone at $1222.70 to $1235.00. This is followed by a major 50% level at $1246.30. This level stopped the rally last week at $1246.00.

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Daily Technical Forecast

Based on the early price action and the chart pattern, the rally may have run its course on Thursday. The direction of the market into the close is likely to be determined by trader reaction to the major Fibonacci level at $1235.80.

Bullish Scenario

A sustained move under $1235.80 will indicate that sellers are coming in to stop the rally, or that the buying has slowed. Crossing under a minor Fib level at $1233.60 will indicate the selling is getting stronger. The next target is a price cluster at $1230.00 to $1229.70.

Crossing under the minor 50% level at $1229.70 will put gold in a weak position, and set up the market for a potential acceleration into $1222.70.

Bearish Scenario

Overtaking and sustaining a rally over $1235.80 will indicate the buying is getting stronger. This could trigger a rally into a downtrending Gann angle at 1238.00. This angle is a potential trigger point for an acceleration into the next downtrending Gann angle at $1242.00. This is the last potential resistance angle before the $1246.00 main top.

 

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