Taking out $1850.80 could trigger an acceleration to the upside with the November 26 main top at $1882.50 the next major target.
Gold futures are edging higher on Monday, supported by a drop in U.S. Treasury yields. Gains are likely being limited by a stronger U.S. Dollar. Investors seeking protection are buying the true safe-haven markets – U.S. Treasurys and the dollar. The catalysts behind the moves are caution over the escalating tensions in Ukraine and a widely anticipated hawkish lean by the Federal Reserve on Wednesday.
At 12:43 GMT, April Comex gold futures are trading $1841.50, up $7.40 or +0.40%. On Friday, the SPDR Gold Shares ETF (GLD) settled at $171.08, down $0.57 or -0.33%.
Despite the mixed signals being generated by lower yields and a higher U.S. Dollar, gold remains just under last week’s two-month high, which puts it in a position to breakout to the upside.
The main trend is up according to the daily swing chart. A trade through $1850.80 will single 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 $1845.80 will change the minor trend to down. This will shift momentum to the downside.
The short-term range is $1882.50 to $1755.40. The market is currently trading on the strong side of its retracement zone at $1833.90 to $1819.00, making it new support.
The minor range is $1755.40 to $1850.80. Its 50% level at $1807.20 is additional support.
The main support zone is $1782.50 to $1758.80.
The direction of the April Comex gold futures contract on Monday is likely to be determined by trader reaction to $1833.90.
A sustained move over $1833.90 will indicate the presence of buyers. If this creates enough upside momentum then look for a surge into $1850.80.
Taking out $1850.80 will signal a resumption of the uptrend. This could trigger an acceleration to the upside with the November 26 main top at $1882.50 the next major target.
A sustained move under $1833.90 will signal the presence of sellers. Taking out $1845.80 will change the minor trend to down. This could trigger a further break into $1819.00.
Look for a technical bounce on the first test of $1819.00, but if it fails then look for the selling to extend into the support cluster at $1807.20 to $1803.10.
James Hyerczyk is a U.S. based seasoned technical analyst and educator with over 40 years of experience in market analysis and trading, specializing in chart patterns and price movement. He is the author of two books on technical analysis and has a background in both futures and stock markets.