Comex Gold Futures (GC) Technical Analysis – July 7, 2014 …

Comex Gold Futures (GC) Technical Analysis – July 7, 2014 …

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August Comex Gold futures fell sharply on Thursday, following the release of stronger-than-expected U.S. Non-Farm Payrolls data. This news drove up U.S. interest rates, leading to stronger demand for the dollar and less demand for non-yielding gold.

Early in the session, gold was under pressure after breaking to the bearish side of a major 50% level at $1316.10, but by the end of the session, gold had recovered this level. The initial break was a reaction to the headline payrolls number, however, by the end of the session, traders may have begun to doubt whether this news was enough to sway the Fed to reveal a timeline for future interest rate hikes.

Daily August Comex Gold

The main range was formed by the March 17 top at $1392.00 to the June 3 bottom at $1240.20. The retracement zone formed by this range at $1316.10 to $1334.00 has held gold in a range for two weeks. Taking out $1334.00 with conviction will set a bullish tone while a sustained move through $1316.10 will lead to further downside pressure.

The short-term range is $1305.40 to $1334.90. The pivot price formed by this range at $1320.10 is controlling the near-term direction of the market. Traders should watch this price carefully to avoid getting caught in a whip-saw market. It is possible gold will retrace this price several times before traders finally pick a direction.

Downtrending Gann angles come in at $1322.90, $1328.90 and $1331.90. Since topping at $1334.90 on July1, gold has been walking down the angle at $1322.90 at a pace of $4.00 per day. Traders should watch this angle early to see if resistance develops.

A new range has formed between the June 17 bottom at $1258.00 and the July 1 top at $1334.90. The retracement zone created by this range is $1296.40 to $1287.40. This is the next major downside target. The nearest potential support angle today, however, comes in at $1310.00. Watch for a technical bounce on the first test of this angle, but once it’s taken out with conviction, look for a break into the retracement zone.

As long as there is uncertainty about the Fed’s plans to hike interest rate then look for gold to continue to remain range bound between $1334.90 and $1316.10. Traders may be getting tired of this range, but until better-than-average volume comes in to drive the market either way, the market will continue to trade sideways. Keep in mind that the Fed doesn’t meet until July 29 – 20 so the market may trade in a tight range until then. 

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Comex Gold Futures (GC) Technical Analysis – July 7, 2014 …

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