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James Hyerczyk
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Gold Bars and Dollar

Gold futures are inching higher on Friday, shortly before the regular session opening. The market is recovering from early session weakness that was likely fueled by profit-taking and position-squaring ahead to the release of the U.S. Non-Farm Payrolls report at 1330 GMT. The report is expected to show the U.S. economy added 165K jobs in January. The unemployment rate is expected to remain at 3.9% and average hourly earnings are expected to show a rise of 0.3%. Some are suggesting the data may have been distorted by the 35 day partial government shutdown.

At 1209 GMT, April Comex gold is trading $1326.20, up $1.00 or +0.08%.

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A weak report should make the dollar a less-desirable asset, while driving up foreign demand for dollar-denominated gold.

Daily April Comex Gold

Daily Technical Analysis

The main trend is up according to the daily swing chart. A trade through $1331.10 will signal a resumption of the uptrend. A trade through $1281.50 will change the main trend to down.

The minor trend is also up. A new minor top was formed at $1331.10. A trade though this level will signal a resumption of the minor trend.

Today’s session begins with gold trading on the strong side of a long-term retracement zone at $1319.70 to $1293.60. This is helping to give the market an upside bias. Traders should consider these levels new support.

The short-term range is $1281.50 to $1331.10. If $1319.70 fails as support then its retracement zone at $1306.30 to $1300.40 will become the primary downside target.

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Daily Technical Forecast

Based on the early price action, the direction of the April Comex gold futures contract on Friday is likely to be determined by trader reaction to the major Fibonacci level at $1319.70.

Bullish Scenario

A sustained move over $1319.70 will indicate the presence of buyers. If this can create enough upside momentum then look for buyers to take a run at the steep uptrending Gann angle at $1329.50. Overcoming this angle will put the market in a bullish position with the next target the minor top at $1331.10. Overtaking this top could trigger a rally into the June 14, 2018 main top at $1337.80.

Bearish Scenario

A sustained move under $1319.70 will signal the presence of sellers. The daily chart is wide open under this level with the next target the short-term retracement zone at $1306.30 to $1300.40. Inside this zone is an uptrending Gann angle at $1305.50. Since the main trend is up, look for buyers to come in on a test of this zone.

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