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Uptrending June Gold Looking to Strengthen Over $1958.70

By:
James Hyerczyk
Published: Apr 11, 2022, 11:14 GMT+00:00

The direction of the June Comex gold futures contract on Monday is likely to be determined by trader reaction to $1958.70.

Comex Gold

Gold futures are trading higher on Monday as the U.S. Dollar weakened. However, gains are being capped by another surge in U.S. Treasury yields.

Fundamentally, fresh concerns over Russia’s attacks in eastern Ukraine lent some support, while the prospects of aggressive interest rate hikes by the U.S. Federal Reserve remained the biggest obstacle for bullish investors.

At 10:51 GME, June Comex gold futures are trading $1958.40, up $12.40 or +0.64%. On Friday, the SPDR Gold Shares ETF (GLD) settled at $181.41, up $1.07 or +0.59%.

The U.S. Dollar Index is struggling early Monday after topping 100 for the first time in nearly two years on Friday on bets of aggressive Fed measures to contain soaring inflation. A stronger dollar makes gold less attractive for other currency holders.

U.S. Treasury yields are at their highest level since March 2019 amid the hawkish stance laid out by the Fed in last week’s minutes. Higher U.S. interest rates and yields increase the opportunity cost of holding bullion, which is also used as a hedge against rising inflation.

Daily June Comex Gold

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. The trend turned up earlier today when buyers took out $1955.00. The next target is the main top at $1972.50. A move through $1916.20 will change the main trend to down.

The market is currently testing the upper or Fibonacci level of a major retracement zone at $1958.70.

Support is a 50% level at $1932.90, and a support cluster at $1908.10 to $1897.70. The nearest resistance is a short-term retracement zone at $1987.60 to $2009.90.

Daily Swing Chart Technical Forecast

The direction of the June Comex gold futures contract on Monday is likely to be determined by trader reaction to $1958.70.

Bullish Scenario

A sustained move over $1958.70 will indicate the presence of buyers. The first upside target is the main top at $1972.50.

Taking out $1972.50 will reaffirm the uptrend with a short-term retracement zone at $1987.60 to $2009.90 the next target area. Look for aggressive counter-trend sellers on the first test of this zone. However, a breakout over $2009.90 could trigger an acceleration to the upside with $2082.00 the next major target.

Bearish Scenario

A sustained move under $1958.70 will signal the presence of sellers. This could trigger a sharp break into the 50% level at $1932.90.

If $1932.90 fails we could see a test of the main bottom at $1916.20, followed by the support cluster at $1908.10 – $1897.70.

For a look at all of today’s economic events, check out our economic calendar.

About the Author

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.

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