Based on the early price action, the direction of the gold market today is likely to be determined by trader reaction to $1349.80 and $1353.00.
April Comex Gold futures finished higher on Thursday in response to a weaker U.S. Dollar. Gains may have been limited by rising U.S. Treasury yields and ahead of the U.S. Non-Farm Payrolls report at 1330 GMT.
The main trend is up according to the daily swing chart. However, momentum has been drifting sideways to lower since January 25.
A trade through $1370.50 will signal a resumption of the uptrend. A move through $1329.10 will change the main trend to down. Yesterday’s price action made $1335.50 a new minor bottom.
The minor range is $1329.10 to $1370.50. Its 50% level or pivot is $1349.80.
The short-term range is $1370.50 to $1335.50. Its 50% level or pivot is $1353.00.
The minor range and short-term pivots are controlling the direction of the market.
The main range is $1242.70 to $1370.50. If the trend changes to down then look for a possible correction into its retracement zone at $1306.60 to $1291.50.
Based on the early price action, the direction of the gold market today is likely to be determined by trader reaction to $1349.80 and $1353.00.
A sustained move under $1349.80 will indicate the presence of sellers. This could generate the downside momentum needed to take out $1335.50. This will turn the minor trend down and could trigger a further break into $1329.10. This is a possible trigger point for an acceleration into $1306.60.
A sustained move over $1353.00 will signal the presence of buyers. If buying volume increases on this move then look for a surge to the upside with $1370.50 the next major target.
Taking out $1370.50 could create the upside momentum needed to challenge the September 6, 2016 main top at $1373.30. This is followed by the August 18, 2016 main top at $1382.20.
James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.