Gold Price Futures (GC) Technical Analysis – August 4, 2017 Forecast

December Comex Gold futures are trading flat-to-slightly higher shortly ahead of the release of today’s U.S. Non-Farm Payrolls report. A weak report could send the U.S. Dollar lower which would make the dollar-denominated gold market a more attractive investment.

The U.S. Non-Farm Employment Change is expected to show the economy added 182K jobs in July. The Unemployment Rate is expected to fall to 4.3% from 4.4%. Average Hourly Earnings are expected to rise 0.3%, up from 0.2%.

Average hourly earnings are a good indicator of inflation. If they come in lower than expected then this will be bearish for U.S. interest rates and the U.S. Dollar because it will reduce the chances of a Fed rate hike this year.

Gold traders should also be watching the price action in the U.S. equity markets. Stocks sold-off near the close on Thursday in reaction to a report that the Russia investigation is intensifying. According to a report from The Wall Street Journal released minutes before the close, Special Counsel Robert Mueller impaneled a grand jury in his investigation into Russia’s involvement in the U.S. election.

I firmly believe that gold will surge sharply higher if the stock market sells off. Cash is likely to leave the market and move into gold. This should be enough to fuel the next breakout rally.

Technical Analysis

The main trend is up according to the daily swing chart. A trade through $1280.30 will reaffirm the uptrend. This could put gold on a path towards the June 6 main top at $1305.50.

A trade through $1262.90 will be a sign of weakness, but the trend won’t change to down unless $1249.40 fails as support.

The main range is $1305.50 to $1211.10. Its retracement zone at $1269.40 to $1258.30 has been providing support all week.

The short-term range is $1211.10 to $1280.30. If the trend changes to down then look for a break into its retracement zone at $1245.70 to $1237.50.

Forecast

Based on the current price at $1275.50, the direction of the gold market today will be determined by trader reaction to the uptrending angle at $1277.40.

Overtaking $1277.40 could create the upside momentum needed to overtake the main top at $1280.30. This is followed by a downtrending angle at $1284.50.

Taking out $1284.50 could trigger an acceleration into the next downtrending angle at $1295.50. This is the last potential resistance angle before the $1305.50 main top.

A failure to overcome $1277.40 will indicate the presence of sellers. This could drive gold into $1269.40 then an uptrending angle at $1263.40.

The daily chart starts to open up to the downside under $1263.40 with $1258.30 the next target. This is followed by a support cluster at $1249.40 to $1249.10.

Watch the price action and read the order flow at $1277.40 all session. This will tell us if the buyers or sellers are in control.