Comex Gold Futures (GC) Technical Analysis – November 2, 2016 Forecast

December Comex Gold futures are trading higher during the pre-market session. Traders are reacting to the weaker U.S. Dollar. The price action the last few days suggest that traders have priced in the expected Fed rate hike in December. The main driver of the price action at this time is the uncertainty over the U.S. presidential election on Tuesday, November 8.

Traders have been on edge since last Friday when the U.S. Federal Bureau of Investigation announced that it was renewing its investigation of emails from Democratic candidate Hillary Clinton. New polls show that Clinton has lost some ground and Trump has gained some support. This puts the election at a virtual dead heat according to some sources.

Gold investors remember what happened with the Brexit vote and they are taking positions ahead of the election. Clinton is considered the status quo so a victory by Trump would cause turmoil in the markets.

Technical Analysis

The main trend is up according to the daily swing chart as well as the momentum.  The next main top is at $1347.80, but the market still has to overcome a major retracement zone before we can even think about reaching that level. A trade through $1260.10 will change the main trend to down.

The main range is $1347.80 to $1243.20. Its retracement zone at $1295.50 to $1307.80 is the primary upside target. This zone is controlling the longer-term direction of the market. The market is currently testing the lower level of this zone at $1295.50. Crossing to the strong side of this level will indicate the buying is getting stronger, but I think the more important number is the Fibonacci level at $1307.80.

Forecast

Based on the current price at $1294.10 (0716 GMT), the direction of the market the rest of the session is likely to be determined by trader reaction to the 50% level at $1295.50.

A sustained move over $1295.50 will indicate the presence of buyers. This could trigger a surge into the Fib level at $1307.80. This is another trigger point for an acceleration into the long-term downtrending angle at $1380.80. This is followed by another Gann angle at $1333.30. This is the last potential resistance angle before the $1347.80 main top.

A sustained move under $1295.50 will signal the presence of sellers. The first downside target is a pair of Gann angles at $1289.80 and $1288.10.

If $1288.10 fails as support then look out to the downside since the next major target doesn’t come in until $1274.10.

Watch the price action and read the order flow at $1295.50 today. Trader reaction to this level will determine if the buyers or sellers are in control today.

Gold Fundamental Forecast