Gold Price Futures (GC) Technical Analysis – November 7, 2018 Forecast

Gold is trading higher due to the weaker U.S. Dollar and a dip in Treasury yields. The dollar is under pressure reaction to the Democrats taking control of the U.S. House of Representatives following Tuesday’s mid-term elections. With the Republicans retaining control of the Senate, a split U.S. Congress has been created, raising expectations that any major fiscal boost to the economy is unlikely for perhaps the next two years, or the rest of President Trump’s term. This could dampen the Fed’s plan to raise rates aggressively, making the dollar a less-desirable investment, while creating foreign demand for dollar-denominated gold.

At 1310 GMT, December Comex Gold is trading $1233.10, up $6.80 or +0.55%.

Daily Technical Analysis

The main trend is up according to the daily swing chart. A trade through $1239.30 will make $1213.40 a new main bottom. A trade through $1246.00 will signal a resumption of the uptrend.

The minor trend is also up. A move through $1213.40 will change the minor trend to down. This will also shift momentum to the downside.

The short-term range is $1246.00 to $1213.40. The market is currently straddling its retracement zone at $1229.70 to $1233.50. This zone is controlling the near-term direction of the market.

On the upside, the 50% level at $1246.30 is the primary target. On the downside, the key support zone is $1215.20 to $1207.90.

Daily Technical Forecast

Based on the early price action, the direction of the December Comex Gold futures contract on Wednesday is likely to be determined by trader reaction to the retracement zone at $1229.70 and $1233.50. Trading in between these levels will likely lead to a sideway move.

A sustained move over $1233.50 will indicate the presence of buyers. The first upside target is a downtrending Gann angle at $1238.00. This angle stopped the rally earlier today. Taking out $1239.30 should trigger a rally into the next downtrending Gann angle at $1242.00. This is the last potential resistance angle before the main top at $1246.00 and the 50% level at $1246.30.

Look for an acceleration to the upside if $1246.30 is taken out with conviction.

The inability to overcome $1233.50 will signal the presence of sellers, but don’t expect a breakout to the downside unless sellers can take out the downtrending Gann angle/50% level combination at $1230.00 and $1229.70.

The daily chart indicates there is plenty of room to the downside if $1229.70 fails as support. The next major downside target comes in at $1215.20 to $1213.40.