Gold Price Forecast XAU/USD – Trader Reaction to $1947.90 Sets the Tone on Friday

Gold futures are trading nearly flat on Friday with rising Treasury yields and a stronger U.S. Dollar capping gains ahead of today’s key U.S. economic reports that could have an impact on Fed policy at next week’s meeting. Robust data on Thursday likely greenlighted the Fed to keep interest rates high for longer.

At 13:00 GMT, April Comex Gold is trading $1947.80, up $1.10 or +0.06%. On Thursday, the SPDR Gold Shares ETF (GLD) settled at $179.46, down $1.65 or -0.91%.

U.S. GDP data on Thursday showed the U.S. economy grew faster than expected, prompting speculation that even though inflation is starting to look a little softer, the Fed will probably have to keep rates higher for longer. This contrasted speculation earlier in the week that called for the Fed to stop raising rates in June and perhaps make two rate cuts before the end of the year.

Investors are now awaiting the release of the personal consumption expenditure price index (PCE) report at 13:30 GMT, which is one of the Federal Reserve’s favored inflation measures. It reflects how much consumers spend on goods and services.

Personal income and spending figures are also due Friday.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. However, Thursday’s closing price reversal top suggests momentum may be getting ready to shift to the downside.

A trade through $1966.50 will negate the closing price reversal top and signal a resumption of the uptrend. A move through $1935.10 will confirm the closing price reversal top. This won’t change the main trend to down, but it could trigger the start of a 2-3 day correction.

The minor trend is also up. A trade through $1929.20 will change the minor trend to down. This will confirm the shift in momentum.

The minor range is $1929.20 to $1966.50. The market is currently straddling its pivot at $1947.90.

The nearest support is a 50% level at $1906.30, while the major upside target is the April 18 main top at $2039.00.

Daily Swing Chart Technical Forecast

Trader reaction to the minor pivot at $1947.90 is likely to determine the direction of the April Comex gold futures contract on Friday.

Bullish Scenario

A sustained move over $1947.90 will indicate the presence of buyers. If this creates enough upside momentum then look for a surge into this week’s high at $1966.50. This is a potential trigger point for an acceleration to the upside.

Bearish Scenario

A sustained move under $1947.90 will signal the presence of sellers. This could trigger a break into the minor bottom at $1929.20. If this is taken out then the selling could possibly extend into the 50% level at $1906.30.