April Gold Reaction to $1899.80 Sets Near-Term Tone

Gold futures are trading higher late in the session on Monday, but is well off its high after an early spike to the upside turned into a mostly rangebound intraday trade.

Prices jumped on the opening on Monday after the United States and its Western allies slapped more sanctions on Russia over its invasion of Ukraine. Today’s rally has put safe-haven gold on pace to post its biggest monthly percentage gain in nine.

At 19:29 GMT, April Comex gold is trading $1904.90, up $17.30 or +0.92%. The SPDR Gold Shares ETF (GLD) is at $177.75, up $1.20 or +0.68%.

In related news, Russia’s central bank on Monday moved to shield the economy as its invasion of Ukraine continued, bolstering other measures including an assurance it would resume buying gold in the domestic market.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart, but the market has been rangebound for two trading days.

A trade through $1821.10 will change the main trend to down. A move through $1976.50 will signal a resumption of the uptrend.

The minor trend is also up. A trade through $1845.40 will change the minor trend to down. This will shift momentum.

The main range is the contract’s range of $2117.10 to $1682.40. The market is currently trading inside its retracement zone at $1899.80 to $1951.00. This zone is controlling the longer-term direction of the gold market.

The minor range is $1976.50 to $1878.60. Its pivot at $1927.60 acted like resistance earlier on Monday.

The short-term range is $1780.60 to $1976.50. Its retracement zone at $1878.60 to $1855.40 is the key support propping up the market.

Short-Term Outlook

The direction of the April Comex gold market into the close on Monday is likely to be determined by trader reaction to the major 50% level at $1899.80.

Bullish Scenario

A sustained move over $1899.80 will indicate the presence of buyers. Overcoming the pivot at $1927.60 will indicate the buying is getting stronger. This could trigger a late session surge into the major Fibonacci level at $1951.00.

The Fib level at $1951.00 is a potential trigger point for an acceleration into last week’s high at $1976.50, which is also a trigger point for an acceleration to the upside with the August 6, 2020 main top at $2117.10 the next major target.

Bearish Scenario

A sustained move under $1899.80 will signal the presence of sellers. This could trigger a quick break into the short-term retracement zone at $1878.60 – $1855.40.

The short-term Fibonacci level at $1855.40 is a potential trigger point for an acceleration to the downside with the main bottom at $1821.10 the next major target. Taking out this level will change the main trend to down.