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April Gold Needs to Hold $1830.60 to Sustain Upside Momentum

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Comex gold futures are edging lower on Tuesday, as concerns about a faster pace of policy tightening by the U.S. Federal Reserve overshadowed safe-haven demand fueled by escalating tension over Ukraine. From a market perspective, gold is being underpinned by a small drop in U.S. Treasury yields, but a slightly stronger U.S. Dollar is providing resistance.

At 09:46 GMT, April Comex gold futures are trading $1839.60, down $4.60 or -0.25%. On Monday, the SPDR Gold Shares ETF (GLD) settled at $172.01, up $0.92 or +0.54%.

The muted price action so far this week is a reflection of mixed news events. Helping to support prices is risk-off sentiment due to concerns over a potential military conflict between Ukraine and Russia. Putting a lid on the market, however, are rising Treasury yields on Fed tapering expectations and hedge fund position-squaring.

In other news, holdings of the world’s largest gold-backed exchange traded fund, SPDR Gold Trust, rose to their highest since late August 2021 last Friday.

Daily April Comex Gold
Daily April Comex Gold

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through $1850.80 will signal a resumption of the uptrend. A move through $1783.80 will change the main trend to down.

The minor trend is also up. A trade through $1830.60 will change the minor trend to down. This will shift momentum to the downside.

The short-term range is $1882.50 to $1755.40. Gold is trading on the strong side of its retracement zone at $1833.90 to $1819.00, making it support.

The minor range is $1755.40 to $1850.80. If the minor trend turns down then its 50% level at $1803.10 will become support.

The main support is the $1782.50 to $1758.80 retracement zone.

On the upside, the major resistance is a long-term 50% level at $1899.80.

Daily Swing Chart Technical Forecast

The direction of the April Comex gold market on Tuesday is likely to be determined by trader reaction to $1840.70.

Bullish Scenario

A sustained move over $1840.70 will indicate the presence of buyers. If this move creates enough upside momentum then look for a surge into $1850.80.

Taking out the minor top at $1850.80 could trigger an acceleration to the upside with the November 16 main top at $1882.50 the next target. This is followed by a major 50% level at $1899.80.

Bearish Scenario

A sustained move under $1840.70 will signal the presence of sellers. The first downside target is a Fibonacci level at $1833.90, followed by the minor bottom at $1830.60 and a 50% level at $1819.00.

The selling pressure will start to open up if $1819.00 fails as support with $1807.20 and $1803.10 the next targets.

For a look at all of today’s economic events, check out our economic calendar.

This article was originally posted on FX Empire