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April Gold Enters Major Support Zone at $1951.00-$1899.80

By:
James Hyerczyk
Published: Mar 15, 2022, 12:06 UTC

The direction of the April Comex gold futures contract on Tuesday is likely to be determined by trader reaction to the 50% level at $1929.70.

Comex Gold

In this article:

Gold futures are trading lower on Tuesday as prices entered the major retracement zone that could determine the long-term direction of the market.

With Treasury yields and the U.S. Dollar lower, and ceasefire talks between Russia and Ukraine intensifying, the price action is likely being fueled by a reduction in the “war premium” that has been built up for several weeks.

At 11:38 GMT, April Comex gold futures are trading $1927.90, down $32.90 or -1.68%. On Monday, the SPDR Gold Shares ETF (GLD) settled at $182.31, down $2.78 or -1.50%.

Continue to look for heightened volatility in the market over the near-term as the Ukraine situation is still unfolding. Although speculators are currently reducing exposure in gold due to an anticipated de-escalation of the fighting between Russia and Ukraine, conditions can turn bullish again quite quickly.

With the market pricing in nearly a 100% chance of a 25-basis point rate hike by the Federal Reserve on Wednesday, the wildcard this week will be whether the war intensifies or whether peace prevails.

Daily April Comex Gold

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart despite the nearly $150+ sell-off since March 8. A trade through $1821.10 will change the main trend to down, while a move through $2078.80 will signal a resumption of the uptrend.

The minor trend is also up. A trade through $1878.60 will change the minor trend to down. This will also shift the momentum.

The main range is the contract range of $2117.10 to $1682.40. Gold is currently trading inside its retracement zone at $1899.80 to $1951.00.

The short-term range is $1780.60 to $2078.80. Its 50% level at $1929.70 is currently trading inside the major retracement zone.

On the upside, the minor resistance is a pivot at $1978.70.

Daily Forecast

The direction of the April Comex gold futures contract on Tuesday is likely to be determined by trader reaction to the 50% level at $1929.70.

Bearish Scenario

A sustained move under $1929.70 will indicate the presence of sellers. This could trigger a sharp break into the long-term 50% level at $1899.80. Breaking this level could extend the move into the minor bottom at $1878.60.

Momentum will shift to down if $1878.60 fails to hold. This could trigger the start of an acceleration into $1845.40 – $1821.10.

Bullish Scenario

A sustained move over $1929.70 will signal the presence of buyers. This could trigger a rally into the long-term Fibonacci level at $1951.00, followed by the minor pivot at $1978.70. The latter is a potential trigger point for an acceleration to the upside.

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

About the Author

James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.

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