April Gold Threatening to Form Weekly Reversal Top

Comex gold futures are trading lower on Friday after briefing dipping lower for the week. Gold is being pressured as investors sized up potential rate hikes from the U.S. Federal Reserve and following a report that ceasefire talks could be gaining traction between Russia and Ukraine.

At 13:04 GMT, April Comex gold futures are trading at $1975.20, down $25.20 or -1.26%. On Thursday, the SPDR Gold Shares ETF (GLD) settled at $186.44, up $0.62 or +0.33%.

Gold is weakening because of dampened concerns over the two factors driving the market high the past few weeks – inflation and the war in Ukraine. This is spooking weaker longs into booking profits and waiting for a pullback into a support or value area.

The precious metal is now weakening, with the likelihood of interest rate hikes from the U.S. Federal Reserve adding some pressure while investors awaited additional developments surrounding Ukraine. These additional developments include a Reuters report quoting Russian President Vladimir Putin saying that “certain positive shifts” have occurred in the talks.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through $2078.80 will signal a resumption of the uptrend. A move through $1821.10 will change the main trend to down.

The minor trend is also up. A trade through $1878.60 will change the minor trend to down. This will shift momentum to the downside.

The minor range is $1878.60 to $2078.80. The market is currently straddling its pivot at $1978.70.

The major support is the long-term retracement zone at $1899.80 to $1978.70. Sentiment could shift to the downside if this area fails as support.

Daily Swing Chart Technical Forecast

The direction of the April Comex gold futures contract on Friday is likely to be determined by trader reaction to the pivot at $1978.70.

Bullish Scenario

A sustained move over $1978.70 will indicate the presence of buyers. If this creates enough upside momentum then look for a surge into a minor pivot, currently at $2022.10.

A failure to overcome $2022.10 will signal the presence of counter-trend sellers. Taking it out, however, could trigger an acceleration into $2078.80.

Bearish Scenario

A sustained move under $1978.70 will indicate the presence of sellers. This could trigger a further break into the major Fib level at $1951.00.

The Fibonacci level at $1951.00 is a potential trigger point for an acceleration to the downside with the major 50% level at $1899.80 the next likely target.

Side Notes

A close under $1966.60 will form a potentially bearish weekly closing price reversal top. If confirmed next week, it could trigger the start of a 2 to 3 week correction.