Counter-Trend Gold Buyers Eyeing $1819.00 – $1833.90

Gold futures edged higher on Monday as short-sellers booked profits in reaction to a plunge in the U.S. Dollar. Nonetheless, expectations for interest rate hikes by the U.S. Federal Reserve helped the non-yielding asset post its worst monthly performance since September 2021.

On Monday, April Comex gold futures settled at $1796.40, up $9.80 or +0.55%. The SPDR Gold Share ETF (GLD) finished at $168.06, up $0.96 or +0.57%.

Meanwhile, the greenback fell on Monday, posting its largest daily fall since November 2021 as investors took profits after hitting an 18-month high on Friday on expectations of a faster pace of rate hikes by the Federal Reserve.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through $1780.60 will signal a resumption of the downtrend. A move through $1856.70 will change the main trend to up.

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

The short-term range is $1882.50 to $1755.40. Its retracement zone at $1819.00 to $1833.90 is resistance.

Short-Term Outlook

The short-term direction of the April Comex gold futures contract is likely to be determined by trader reaction to $1782.50.

Bearish Scenario

A sustained move under $1782.50 will indicate the presence of sellers. Taking out $1780.60 will indicate the selling pressure is getting stronger. This could trigger an acceleration into $1758.80, followed closely by $1755.40. The latter is a potential trigger point for an acceleration to the downside with $1725.00 the next major target.

Bullish Scenario

A sustained move over $1782.50 will signal the presence of counter-trend buyers. Taking out $1800.90 will indicate the short-covering is getting stronger. If this move creates enough upside momentum then look for a potential surge into $1819.00 to $1833.90. Since the main trend is down, sellers are likely to re-emerge on a test of this area.