April Gold Traders May Be Waiting for Pullback into Support

Gold futures are trading higher on Monday but holding within the previous session’s range. Although gold rallied on Friday, today’s price action suggests investors are being a little cautious due to a surge in the U.S. Dollar. This suggests that Friday’s price action may have been fueled by short-covering rather than aggressive buying.

Nonetheless, the market is being supported by reports that Russia may be gearing up for an imminent invasion of Ukraine. So we could see the return of buyers if the market dips back into a support area.

At 11:56 GMT, April Comex gold is trading $1857.80, up $15.70 or +0.85%. On Friday, the SPDR Gold Shares ETF (GLD) settled at $173.78, up $3.22 or +1.89%.

Gold is often referred to as a safe-haven assets, but in reality, the true safe-havens are U.S. Treasury bonds, the Japanese Yen and the U.S. Dollar. Furthermore, a stronger U.S. Dollar tends to reduce foreign demand for the dollar-denominated asset.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through $1867.40 will signal a resumption of the uptrend. A move through the November 16 main top at $1882.50 will reaffirm the uptrend. The main trend changes to down on a trade through $1821.10.

The minor range is $1821.10 to $1867.40. Its 50% level or pivot at $1844.30 is support.

The short-term range is $1882.50 to $1755.40. Its retracement zone at $1833.90 to $1819.00 is support.

The main range is $1682.40 to $1882.50. Its retracement zone at $1782.50 to $1758.80 is the major support.

Daily Swing Chart Technical Forecast

The direction of the April Comex gold futures contract on Monday will likely be determined by trader reaction to $1844.30.

Bullish Scenario

A sustained move over $1844.30 will indicate the presence of buyers. If this move creates enough upside momentum then look for a test of $1867.40, followed by 1882.50. Taking out this level could trigger a further rally into the major 50% level at $1899.80.

Bearish Scenario

A sustained move under $1844.30 will signal the presence of sellers. This could trigger the start of a labored rally with potential downside targets $1833.90, $1821.10 and $1819.00.

The 50% level at $1819.00 is a potential trigger point for an acceleration to the downside with the next major target the main 50% level at $1782.50.