April Gold Pops Resistance Zone with $1882.50 Next Target

Gold futures are edging lower after hitting its highest level since November 22 earlier in the session. Putting a cap on the market on Thursday are slightly higher Treasury yields and a firm U.S. Dollar. Volume is light and the range is tight after prices jumped the most in three months on Wednesday on a weaker dollar and increased safe-haven demand.

At 05:53 GMT, April Comex gold futures are trading $1841.80, down $3.70 or -0.20%.

Although the widely expected Federal Reserve interest rate increase in March is threatening to keep a lid on gold prices, the focus for gold speculators seems to be on the Russia-Ukraine situation, which is something the Fed can’t control.

Gold prices seemed to have received a boost on Wednesday when U.S. President Joe Biden, citing simmering tensions between the West and Russia, predicted Moscow would make a move into neighboring Ukraine, although Russian officials have denied this. Meanwhile, according to reports, the Russian army has massed some 100,000 troops near Ukraine’s borders.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through the overnight high at $1846.60 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 $1807.20 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 currently trading on the strong side of its retracement zone at $1833.90 to $1819.00, making this area support.

The main range is $1682.40 to $1882.50. Its retracement zone at $1782.50 to $1758.80 is the major support controlling the longer-term direction of the market.

Daily Swing Chart Technical Forecast

The direction of the April Comex gold futures contract on Thursday is likely to be determined by trader reaction to the retracement zone at $1833.90 to $1819.00.

Bullish Scenario

A sustained move over $1833.90 will indicate the buying is getting stronger. This could even trigger an acceleration to the upside since the daily chart indicates there is not actual resistance until the November 16 main top at $1882.50. This is followed by the two-year 50% level at $1899.80.

Bearish Scenario

A sustained move under $1833.90 will be the first sign of weakness, but taking out $1819.00 could indicate the selling pressure is getting stronger.

Side Notes

Thursday’s marks the eighth day up from the last main bottom on January 7.This puts the market inside the window of time for a potentially bearish closing price reversal top. This chart pattern may not change the trend, but if confirmed, it could lead to the start of a 2 to 3 day correction.