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Comex Gold Futures (GC) Technical Analysis – September 26, 2016 Forecast

December Comex Gold futures are trading slightly lower in light-trading early Monday. Based on the price action the last two sessions, gold can best be described as being in a holding pattern.

Last week, it surged to the upside on September 21 on the initial reaction to the Fed’s decision to leave interest rates unchanged in September. However, since then it has drifted sideways to lower. The move suggests that investors aren’t certain about the next direction to take and are waiting for more information about the timing of the next Fed rate hike and the strength of the economy.

Volume may be light today and volatility low as investors prepare for the first U.S. presidential debate at 0100 GMT on Tuesday. This could be a market moving event because an estimated 100 million Americans are expected to watch it on TV.

The way I see it, candidate Clinton is the poll leader so let’s day her victory is already built into the markets. Therefore, if she loses the debate the markets are likely to react violently. If this is the case then money could flow into gold and the Japanese Yen. If she wins this debate then stocks may surge and gold may be pressured.

TECHNICAL ANALYSIS

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Daily December Comex Gold

The main trend is down according to the daily swing chart. A trade through $1357.60 will turn the main trend to up. A trade through $1309.20 will signal a resumption of the downtrend. Since September 9, there has been a bias to the upside. On September 21, the momentum shifted to the upside.

The main range is $1259.10 to $1384.40. Its retracement zone at $1321.80 to $1307.00 is the primary downside target. This zone provided major support on September 1 at $1305.50 and on September 16 at $1309.20.

For longer-term traders, we could see a strong upside bias if $1321.80 to $1307.00 continues to hold as support. If this zone fails as support then look out to the downside.

FORECAST

BASED ON THE CURRENT PRICE AT $1338.90 (0818 GMT) AND THE EARLIER PRICE ACTION, THE DIRECTION OF THE DECEMBER COMEX GOLD FUTURES CONTRACT TODAY IS GOING TO BE DETERMINED BY TRADER REACTION TO THE DOWNTRENDING ANGLE AT $1336.30.

A SUSTAINED MOVE OVER $1336.30 WILL INDICATE THAT BUYERS ARE COMING IN TO SUPPORT THE MARKET. IF VOLUME STARTS TO INCREASE THEN WE COULD SEE A RALLY INTO THE NEXT RESISTANCE ANGLE AT $1350.30. THIS IS A POSSIBLE TRIGGER POINT FOR ANOTHER SURGE INTO A DOWNTRENDING ANGLE AT $1355.90 AND A MAIN TOP AT $1357.60.

IF $1336.30 FAILS AS SUPPORT THEN LOOK FOR A POSSIBLE BREAK INTO AN UPTRENDING ANGLE AT $1333.20. THIS ANGLE IS A POSSIBLE TRIGGER POINT FOR AN ACCELERATION INTO A CLUSTER OF NUMBERS AT $1323.10, $1321.80 AND $1321.20.

WATCH THE PRICE ACTION AND READ THE ORDER FLOW AT $1336.30 TODAY. TRADER REACTION TO THIS ANGLE WILL TELL US IF THE BUYERS ARE STILL COMING IN TO SUPPORT THE RALLY, OR IF SELLERS ARE REGAINING CONTROL.

BE CAREFUL SELLING WEAKNESS AND BUYING STRENGTH BECAUSE VOLUME MAY BE LIGHT.

 

 

Published by

James Hyerczyk

James A. Hyerczyk has worked as a fundamental and technical financial market analyst since 1982. His technical work features the pattern, price and time analysis techniques of W.D. Gann.