Gold Price Futures (GC) Technical Analysis – Fed Statement Could Cause Volatile Reaction

April Comex Gold futures are trading higher early Wednesday and inside yesterday’s range. The chart pattern suggests investor indecision and impending volatility.

Traders showed little reaction to President Trump’s first State of the Union Address on Tuesday night. This was probably because he didn’t talk about the U.S. Dollar, protectionism or tariffs.

Traders are primarily focused on the Fed’s monetary policy statement, due to be released today at 1900 GMT. The Fed is widely expected to leave interest rates unchanged, but traders will be more interested in what the central banks says about inflation and the number of expected rate hikes in 2018.

Daily Swing Chart Analysis

The main trend is up according to the daily swing chart. However, momentum is starting to shift to the downside.

A trade through $1370.50 will signal a resumption of the uptrend. This could trigger the momentum needed to challenge former tops at $1373.30 and $1382.20.

The main trend will change to down on a move through $1329.10.

The short-term range is $1329.10 to $1370.50. Its 50% level or pivot at $1349.80 is controlling the short-term direction of the market.

The main range is $1242.70 to $1370.50. If the trend changes to down then its retracement zone at $1306.60 to $1291.50 will become the primary downside target.

Daily Swing Chart Forecast

Based on the early trade, the direction of the gold market today is likely to be determined by trader reaction to the pivot at $1349.80.

A sustained move under $1349.80 will signal the presence of sellers. This could generate the downside momentum needed to challenge the main bottom at $1329.10. Taking out this level could trigger an acceleration to the downside with $1306.60 the initial downside target.

A sustained move over $1349.80 will indicate the presence of buyers. This could fuel a retracement of the break from $1370.50. If the buying is strong enough, we could even see a resumption of the uptrend.