Comex Gold Trying to Breakout Above Long-Term Support Zone

Comex gold futures finished lower on Friday but up for the week as concerns over the war in Ukraine and rising commodity prices boosted its appeal as an inflation hedge. Prices retreated late in the session as U.S. Treasury yields reached new multi-year highs.

On Friday, June Comex gold futures settled at $1959.80, down $7.90 or -0.40%. The SPDR Gold Shares ETF (GLD) finished at $182.41, down $0.72 or -0.39%.

Gold is seen as a safe-haven investment during times of political and financial uncertainty, but this hasn’t been the case lately. There have been limited signs of safe-haven buying over the past two weeks. If there was the need for safe-haven buying then Treasury bonds and the Japanese Yen would’ve been the first markets to buy. Both have gone straight down.

In my opinion, gold is being supported because investors believe the Federal Reserve is behind the curve when it comes to fighting inflation. Although Fed Chairman Jerome Powell has pledged to be aggressive in combating inflation, buyers seem to be hanging around hoping it falls short of its goals.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through $2082.00 will signal a resumption of the uptrend. A move through $1900.40 will change the main trend to down.

The minor trend is also up. A trade through $1915.50 will change the minor trend to down. This will shift the momentum.

The main range is $2122.70 to $1783.80. Its retracement zone is $1958.70 to $1908.10.

The intermediate range is $1783.80 to $2082.00. Its retracement zone is $1932.90 to $1897.70.

The two retracement zones combine to form a support cluster at $1908.10 to $1897.70. This zone stopped the selling at $1900.40 on March 16.

The short-term range is $2082.00 to $1900.40. Its retracement zone at $1991.20 to $2012.60 is the nearest upside target.

Short-term Outlook

The Fibonacci levels at $1958.70 and $1897.70 are controlling the near-term direction of the gold market.

Look for an upside bias to develop on a sustained move over $1958.70. If this creates enough upside momentum then look for a surge into $1991.20 to $2012.60.

A sustained move under $1897.70 will indicate the selling pressure is getting stronger. This could lead to a quick test of the main bottom at $1882.00. Taking out this level could trigger an acceleration to the downside.