A weaker U.S. Dollar and a relatively calm stock market is helping to drive April Comex Gold futures higher shortly before the U.S. opening. It could be short-covering and position-squaring ahead of Wednesday’s U.S. consumer inflation report.
Daily Technical Analysis
The main trend is down according to the daily swing chart. Today’s price action has made $1309.00 a new main bottom. A trade through this bottom will signal a resumption of the downtrend.
The main range is $1242.70 to $1370.50. Its retracement zone is $1306.60 to $1291.50. This zone is still the primary downside target. Last week’s low stopped just above this zone.
The short-term range is $1370.50 to $1309.00. If the rally continues then its retracement zone at $1339.80 to $1347.00 will become the primary upside target. Since the main trend is down, sellers are likely to show up on a test of this zone.
Daily Technical Forecast
Based on the early trade, the direction of the gold market today is likely to be determined by trader reaction to the downtrending Gann angle at $1322.50.
A sustained move under $1322.50 will indicate the presence of sellers. This could lead to a test of a series of uptrending Gann angles at $1317.00, $1313.00 and $1311.00. This is followed by the main bottom at $1309.00.
If $1309.00 fails as support then look for the selling to extend into the main retracement zone at $1306.60 to $1291.50.
A sustained move over $1322.50 will signal the presence of buyers. The first target is a long-term uptrending Gann angle at $1313.00. This is the trigger point for an acceleration to the upside with $1339.80 the next major target.