Gold Price Futures (GC) Technical Analysis – October 30, 2018 Forecast
December Comex Gold futures are under pressure on Tuesday. Traders could be reacting to a surge in the U.S. Dollar which is limiting demand for dollar-denominated gold. Traders could also be responding to higher Treasury yields which also tend to weigh on demand because the metal doesn’t pay interest.
The sell-off is confusing because it is also taking place during a time of heightened volatility in U.S. equity markets. It’s hard to believe that hedgers who bought gold as a safe-haven assets are taking profits on their positions. Perhaps they feel that the sell-off in stocks is overdone and the market is ripe for a rebound. Earlier in the session, gold hit its lowest level since October 15, nearly $25.00 off the high reached last Friday.
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Daily Technical Analysis
The main trend is up according to the daily swing chart. However, two days of lower lows has helped form a new main top at $1246.00. The market isn’t close to changing the main trend to down. However, it is rapidly approaching a key short-term retracement zone.
Starting from the top, resistance is a 50% level at $1246.30. This is followed by a Fibonacci level at $1222.70. The market straddled this price earlier in the session.
The main range is $1184.30 to $1246.00. Its retracement zone at $1215.30 to $1208.00 is the primary downside target. This zone represents value. Since the main trend is up, buyers are likely to come in on a test of this zone.
Daily Technical Forecast
Based on the early price action, the direction of the December Comex Gold futures contract is likely to be determined by trader reaction to the 50% level at $1222.70.
A sustained move through $1222.70 will indicate the presence of sellers. If this move creates enough downside momentum, we could see a further plunge into the next 50% level at $1215.30. This is another trigger point for an acceleration to the downside with $1208.00 the next major target. Gann angle support comes in at $1206.30.
Holding $1222.70 and sustaining a rally will indicate the presence of buyers. This could fuel an intraday reversal into a pair of Gann angles at $1228.30 and $1230.00.
Overcoming $1230.00 will indicate the buying is getting stronger. This could trigger a further rally into $1235.80.