April Gold Buyers Trying to Trigger Breakout Over $1833.90

Gold futures are hovering near a two-week high late Tuesday, underpinned by worries over inflation and Russia-Ukraine tension. Gains were being capped, however, by another surge in Treasury yields and a firmer U.S. Dollar.

At 21:45 GMT, April Comex gold is trading $1827.00, up $5.20 or +0.29%. The SPDR Gold Shares ETF (GLD) settled at $170.60, up $0.49 or +0.29%.

On the bullish side, U.S. consumer prices for January are expected to rise 7.3% annually, according to a Reuters poll, after robust labor data last week fanned inflation fears. Meanwhile, the Russia-Ukraine tensions remained at elevated levels despite some of the optimism from French President Macron.

On the bearish side, the benchmark 10-year U.S. Treasury yields hit a more than two-year peak, while the U.S. Dollar rose 0.3% against a basket of major currencies.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through $1856.70 will reaffirm the uptrend. A trade through $1788.50 will change the main trend to down. A move through $1780.60 will reaffirm the downtrend.

Gold is currently testing its short-term retracement zone at $1819.00 to $1833.90.

On the downside, the major support is a long-term retracement zone at $1782.50 to $1758.80.

Short-Term Outlook

The direction of the April Comex gold market early Wednesday will be determined by trader reaction to $1819.00 and $1833.90.

A sustained move over $1833.90 will indicate the presence of buyers. If this move creates enough upside momentum then look for an acceleration into $1856.70.

A sustained move under $1819.00 will signal the presence of sellers. This could trigger a break into a pair of pivots at $1809.20 and $1805.20.

If $1805.20 fails as support then look for the selling to possibly extend into a pair of main bottoms at $1788.50 and $1780.60. If the main bottoms fail then look for a test of the main retracement zone at $1782.50 – $1758.80.