The direction of the April Comex gold market into the close is likely to be determined by trader reaction to the pivot at $1807.80.
Gold futures are inching lower late Tuesday after posting a two-sided trade earlier in the session. The precious metal is being capped by a firm U.S. Dollar, but seemingly underpinned by comments from U.S. Federal Reserve Chairman Jerome Powell, who told a Senate Banking Committee the U.S. economic recovery was “uneven and far from complete”.
At 19:42 GMT, April Comex gold is trading $1802.90, down $6.20 or -0.34%.
The main trend is down according to the daily swing chart. A trade through $1759.00 will signal a resumption of the downtrend. A move through $1856.60 will change the main trend to up.
On the downside, the nearest support is the long-term 50% level at $1787.30. This is followed by the minor 50% level at $1787.10. The two retracement levels form a support cluster.
The first short-term range is $1856.60 to $1759.00. The market is currently straddling its 50% level at $1807.80. The second short-term range is $1878.90 to $1759.00. Its retracement zone at $1819.00 to $1833.10 is a potential resistance area.
The direction of the April Comex gold market into the close is likely to be determined by trader reaction to the pivot at $1807.80.
A sustained move under $1807.80 will indicate the presence of sellers. This could trigger a late session break into the support cluster at $1787.30 to $1787.10. Aggressive counter-trend buyers could come in on the test of the support, hoping to form a potentially bullish secondary higher bottom.
A sustained move over $1807.80 will signal the presence of buyers. This could trigger a rally into the retracement zone resistance at $1819.00 to $1833.10. Since the main trend is down, sellers could come in to defend the trend.
James Hyerczyk is a U.S. based seasoned technical analyst and educator with over 40 years of experience in market analysis and trading, specializing in chart patterns and price movement. He is the author of two books on technical analysis and has a background in both futures and stock markets.