April Gold: Short-Term Pivot at $1927.60 Sets the Tone

Gold futures are trading steady-to-better early Thursday as investors try to recover some of the previous session’s losses. Gains are being capped as risk appetite improved after U.S. Federal Reserve chairman Jerome Powell tried to dampen fears about aggressive interest rate hikes. However, the market remains underpinned by safe-haven demand fueled by the escalating Russia-Ukraine conflict.

At 07:49 GMT, April Comex gold futures are trading $1931.10, up $8.80 or +0.46%. On Wednesday, the SPDR Gold Shares ETF (GLD) settled at $179.74, down $1.88 or -1.03%.

The U.S. Federal Reserve will move forward with plans to raise interest rates this month to try to tame inflation, even as the outbreak of war in Ukraine has made the outlook “highly uncertain,” Fed Chair Jerome Powell said on Wednesday.

Meanwhile, the impact of an escalating conflict in Ukraine kept prices supported as Western sanctions following Moscow’s invasion of Ukraine pummeled Russia’s financial system.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart, however, the market remained inside February 24^th’s wide range for fifth straight session. This chart pattern typically indicates investor indecision and impending volatility.

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

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

Although it’s neither a main nor minor bottom, momentum could shift to the downside if $1878.60 is taken out with by strong sellers.

The minor range is $1976.50 to $1878.60. The market has been straddling its pivot at $1927.60 for four consecutive sessions.

The major long-term range is $2117.10 to $1682.40. April gold is currently trading inside its retracement zone at $1899.80 to $1951.00. This zone is controlling the longer-term direction of the market.

The short-term range is $1780.60 to $1976.50. Its retracement zone at $1878.60 to $1855.40 is support. It is also a potential trigger point for an acceleration to the downside.

Daily Swing Chart Technical Analysis

The short-term direction of the April Comex gold futures contract will be determined by trader reaction to $1927.60.

Bullish Scenario

A sustained move over $1927.60 will indicate the presence of buyers. The first upside target is the major Fibonacci level at $1951.00. Taking out this level could trigger a surge into last week’s high at $1976.50. This is a potential trigger point for an acceleration to the upside with the August 6, 2020 main top at $2117.00 the next major target.

Bearish Scenario

A sustained move under $1927.60 will signal the presence of sellers. This could trigger a labored break with potential downside targets coming in at $1899.80, $1878.60 and $1855.40. The latter is a potential trigger point for the start of an acceleration to the downside.