Gold Price Futures (GC) Technical Analysis – October 5, 2018 Forecast

Gold futures are inching higher early Friday. Volume and volatility are light after three days of heightened activity earlier this week. The market has held up considerably well this week in the wake of a stronger U.S. Dollar and rapidly rising U.S. Treasury yields. Perhaps the market is being underpinned by speculators betting the Fed will lose control of inflation.

At 1102 GMT, December Comex Gold futures are trading $1206.30, up $4.70 or +0.39%.

The direction of the market today is likely to be determined by trader reaction to the U.S. Non-Farm Payrolls report, due to be released at 1230 GMT.

It is expected to show the economy added 185K jobs in September. The unemployment rate is expected to dip to 3.8% from 3.9%. Average Hourly Earnings are forecast to have risen 0.3%.

Bullish jobs data could push yields even higher, making gold vulnerable to renewed downside pressure.

Daily Technical Analysis

The main trend is down according to the daily swing chart. However, momentum has been trending higher since the formation of the closing price reversal bottom on September 28.

A trade through $1215.80 will change the main trend to up. This is followed by main tops at $1218.00 and $1220.70.

A move through $1184.30 will negate the closing price reversal bottom and signal a resumption of the downtrend. This could trigger an acceleration into $1167.10.

The market is also caught between a pair of major retracement zones. On the upside, the resistance zone is $1205.90 to $1215.10. On the downside, the support is $1193.90 to $1187.60.

The short-term range is $1215.80 to $1184.30. Its 50% level or pivot at $1200.10 is controlling the price action this week.

Daily Technical Forecast

Based on the early price action, the direction of the December Comex Gold futures contract on Friday is likely to be determined by trader reaction to the uptrending Gann angle at $1202.10.

A sustained move under $1202.10 will indicate the presence of sellers. This could drive the market into $1200.10. This price is the trigger point for an acceleration to the downside with the next major target coming in at $1193.90.

The 50% level at $1193.90 is another trigger point for a steep break into the Fib level at $1187.60, followed by an uptrending Gann angle at $1184.60 and the reversal bottom at $1184.30.

A sustained move over $1202.10 will signal the presence of buyers. The first two upside targets are a 50% level at $1205.90 and a downtrending Gann angle at $1207.20. This is a potential trigger point for an acceleration into another downtrending Gann angle at $1214.00, followed by a Fib level at $1215.10.

The rally will start to pick up strength over $1215.10, setting up potential breakouts over $1215.80, $1218.00 and $1220.70.

Look for a huge rally if $1220.70 is taken out with conviction.