April Gold: Reaction to $1819.00 – $1833.90 Sets Tone

Gold futures are trading lower on Friday after posting a volatile trade the previous session. The precious metal hit a two-week high early in the session on Thursday after the release of a hot U.S. consumer price report, but prices retreated after investors increased bets for a hefty interest rate hike from the Federal Reserve in March.

At 09:46 GMT, April Comex gold futures are trading $1826.60, down $10.80 or -0.59%. On Thursday, the SPDR Gold Shares ETF (GLD) settled at $170.59, down $0.62 or -0.36%.

Pressure increased on the Fed to take a stronger stand against inflation after an unexpectedly large jump in U.S. consumer prices bolstered the view that the central bank is behind the curve.

The price action suggests some traders are selling gold out of fear of a surge in rate hikes by the Fed, but some speculators continue to bet that central banks will not be able to contain inflation over the short-run.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through $1843.30 will signal a resumption of the uptrend, while a move through $1856.70 will reaffirm the uptrend.

A trade through $1788.50 will change the main trend to down. A move through $1780.60 will reaffirm the downtrend.

The short-term range is $1882.50 to $1755.40. The market is currently trading inside its retracement zone at $1819.00 to $1833.90.

The minor range is $1780.60 to $1843.30. Its 50% level or pivot comes in at $1812.00.

The main range is $1682.40 to $1882.50. Its retracement zone is $1782.50 to $1758.80.

Daily Swing Chart Technical Forecast

The direction of the April Comex gold futures contract on Friday is likely to be determined by trader reaction to $1832.20.

Bearish Scenario

A sustained move under $1832.20 will indicate the presence of sellers. The first downside target is $1819.00, followed closely by $1812.00.

The 50% level at $1812.00 is a potential trigger point for an acceleration to the downside with the nearest targets $1788.50, $1782.50 and $1780.60.

Bullish Scenario

A sustained move over $1832.20 will signal the presence of buyers. The first upside target is a Fibonacci level at $1833.90, followed by the main top at $1843.30.

Taking out $1843.30 will signal a resumption of the uptrend with $1856.70 the next target. This is a potential trigger point for an acceleration into the November 16 main top at $1882.50.