Gold futures are edging higher on Tuesday as traders positioned themselves ahead of a crucial U.S. inflation report that could have a major influence on the Fed’s upcoming interest rate decisions.
At 12:35 GMT, April Comex gold futures are trading $1868.90, up $5.40 or +0.29%. On Monday, the SPDR Gold Shares ETF (GLD) settled at $172.48, down $0.88 or -0.51%.
January’s U.S. consumer price index (CPI) data is due at 13:30 GMT and a Reuters poll forecast the headline CPI figure to rise 0.4%, which would mean a 6.2% annual growth. The Core CPI is projected to rise 0.3% and 5.5%, respectively.
If the inflation data comes in lower than expected, traders are likely to scale back their interest rate expectations, which could be supportive for gold. However, a strong CPI number could see further weakness in gold prices.
Daily April Comex Gold Technical Analysis
The main trend is down according to the daily swing chart. A trade through $1860.80 will signal a resumption of the downtrend. A move through $1902.30 will change the main trend to up.
The main range is $1749.60 to $1975.20. The market is currently testing its 50% level at $1862.40. This level falls inside a long-term retracement zone at $1843.40 to $1889.50.
Daily April Comex Gold Technical Forecast
Trader reaction to the 50% level at $1862.40 is likely to determine the direction of the April Comex gold futures contract on Tuesday.
Bullish Scenario
A sustained move over $1862.40 will indicate the presence of buyers. This could trigger a surge into $1889.50. Overcoming this level will indicate the buying is getting stronger and could extend the rally into $1902.30 and $1909.30. The latter is a potential trigger point for an acceleration to the upside with $1975.20 the next major target.
Bearish Scenario
A sustained move under $1862.40 will signal the presence of sellers. The first target is the long-term 50% level at $1843.40. This is a potential trigger point for an acceleration to the downside with $1749.60 the next major downside target.