Gold Price Futures (GC) Technical Analysis – September 20, 2017 Forecast

December Comex Gold futures are trading higher shortly before the regular session opening and the release of the Fed’s interest rate decision, monetary policy statement and economic projections at 1800 GMT.  A hawkish Fed will likely be bearish for gold and a dovish Fed will likely be bullish for the precious metal.

Fed policymakers are expected to hold the benchmark interest rate unchanged at<1.25 percent and announce their plan to begin reducing the central bank’s $4.5 billion balance sheet.

The Fed is expected to announce a lowering of monthly bond purchases, starting in October. The Fed is also expected to leave the door open for a rate increase at their December 12-13 meeting. At the close on Tuesday, the futures markets implied traders saw a 58.3 percent chance of a rate increase at year-end, according to the CME FedWatch tool.

The best news for gold traders will be if the Fed casts doubt on a December rate hike.

Daily Technical Analysis

The main trend is up according to the daily swing chart, however, momentum has been trending lower since the $1362.40 main top on September 8.

A trade through $1302.30 will change the main trend to down.

The main range is $1281.30 to $1362.40. Its retracement zone is $1321.90 to $1312.30. Gold is currently trading inside this zone. Trader reaction to this zone will set the tone for the day.

The new short-term range is $1362.40 to $1308.10. If momentum shifts back to the upside then the primary upside target will be the short-term retracement zone at $1335.30 to $1341.70.

Daily Forecast

Based on the current price at $1318.00 (0900 GMT) and the earlier price action, the direction of the gold market today will be determined by trader reaction to the Fibonacci level at $1312.30.

The first support is the short-term uptrending angle at $1315.30. This is followed by the long-term uptrending angle at $1313.10 and the Fib level at $1312.30.

The first upside target is the 50% level at $1321.90. This is a potential trigger point for an acceleration into the downtrending angle at $1330.40. If the rally continues to gain traction, we could see a test of the short-term retracement zone at $1335.30 to $1341.70.

If $1312.30 fails as support then look for a potential break into the low at $1308.10. The daily chart opens up to the downside under this level with $1302.30 the next target.

Taking out $1302.30 will change the main trend to down. This could lead to a test of the uptrending angle at $1298.30. This is the last potential support angle before the $1281.30 main bottom.

Watch the price action and read the order flow at $1312.30 all session. Trader reaction to this level will tell us if sellers are increasing pressure or if buyers are returning.