The direction of the April Comex gold futures contract on Friday is likely to be determined by trader reaction to the long-term Fibonacci level at $1951.00.
Gold futures are edging higher on Friday, eyeing its best weekly gain since May 2021, as investors scrambled for safe-haven assets after Russia attacked a nuclear power plant in Ukraine – the largest of its kind in Europe.
At 13:08 GMT, April Comex gold futures are trading $1943.30, up $7.40 or +0.38%. On Thursday, SPDR Gold Shares ETF (GLD) settled at $180.82, up $1.09 or +0.61%.
The market has also garnered support this week from comments from Federal Reserve Chairman Jerome Powell who suggested a 50-basis point rate hike at the central bank’s policy meeting on March 15-16 is not going to happen.
Traders are now awaiting the release of the U.S. Non-Farm Payrolls report for February. However, this may take a backseat to the overnight developments in Ukraine.
The main trend is up according to the daily swing chart. 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.
The main range is $2117.10 to $1682.40. The market is currently trading inside its retracement zone at $1899.80 to $1951.00.
The market is also trading on the strong side of a minor pivot at $1927.60.
The short-term range is $1780.60 to $1976.50. Its retracement zone at $1878.60 to $1855.40 is the key support area.
The direction of the April Comex gold futures contract on Friday is likely to be determined by trader reaction to the long-term Fibonacci level at $1951.00.
A sustained move over $1951.00 will indicate the presence of buyers. This could trigger a surge into the multi-month high at $1976.50. This price is a potential trigger point for an acceleration to the upside with the August 6, 2020 main top at $2117.10 the next major target price.
A sustained move under $1927.60 will signal the presence of sellers. This could lead to a labored break with potential support targets coming in at $1899.80, $1878.60 and $1855.40. The latter is a potential trigger point for an acceleration to the downside.
James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.