April Gold Nearing Potential Support at $1899.80 – $1880.60
Gold futures tumbled on Tuesday as progress in ceasefire talks between Russia and Ukraine dampened the appeal of safe-haven assets. Additionally fear that the U.S. Federal Reserve may hint at an aggressive series of rate hikes throughout the year in addition to tomorrow’s 25-basis point hike also weighed on investor sentiment.
At 21:09 GMT, April Comex gold futures were trading $1919.20, down $41.60 or -2.12%. The SPDR Gold Shares ETF (GLD) settled at $178.91, down $3.39 or -1.86%.
Talks between Russia and Ukraine, discussing a ceasefire and a withdrawal of Russian troops from Ukraine are ongoing, one of Ukraine’s negotiators said.
The prospect of the first U.S. rate hike in three years lifted U.S. 10-year Treasury yields to multi-month highs. Higher interest rates increase the opportunity cost of holding non-yielding bullion.
Daily Swing Chart Technical Analysis
The main trend is up according to the daily swing chart. A trade through $1821.10 will change the main trend to down. 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 shift momentum.
The main range is the contract range at $2117.10 to $1682.40. The market is currently trading at the lower end of its retracement zone at $1899.80 to $1951.00.
The second main range is $1682.40 to $2078.80. Its retracement zone at $1880.60 to $1833.80 is another potential downside target.
The two retracement zones combine to form a potential support cluster at $1899.80 to $1880.60.
The key area to watch over the short-term is the potential support cluster at $1899.80 to $1880.60. Since the main trend is up, buyers could return on a test of this area.
Overcoming $1951.00 will be another sign of the return of buyers, while taking out the 50% level at $1880.60 will indicate the selling pressure is getting stronger. This could trigger an acceleration into $1833.80. This is the last potential support before the main bottom at $1821.10.