Comex gold futures are trading higher shortly before the extended session close on Friday after posting a two-sided trade most of the session. The choppy price action was fueled by an intraday reversal by the U.S. Dollar and a surge in U.S. Treasury yields. The catalyst behind the early session weakness was a surprisingly upbeat U.S. jobs report. Supporting prices later in the day were concerns over soaring inflation.
At 21:07 GMT, April Comex gold is trading $1808.30, up $4.20 or +0.23%. The SPDR Gold Shares ETF (GLD) is at $168.86, up $0.26 or +0.15%.
An unexpected jump in U.S. job growth in January fanned fears around inflation and weighed on risk sentiment among investors. Data showed U.S. Non-Farm Payrolls increased by 467,000 jobs last month versus a pre-report estimate of 150,000 jobs.
After January’s surprisingly strong jobs report, focus swings to consumer inflation in the week ahead and what it could mean for the Federal Reserve’s plan to raise interest rates.
Daily Swing Chart Technical Analysis
The main trend is up according to the daily swing chart. The main trend turned up earlier in the session when buyers took out the previous main top at $1812.00. A trade through $1788.50 will change the main trend to down.
The main range is $1682.40 to $1882.50. Its retracement zone at $1782.50 to $1758.80 is support. The upper area of this zone stopped the selling at $1780.60 on January 28.
The short-term range is $1882.50 to $1755.40. Its retracement zone at $1819.00 to $1833.90 is resistance.
The new minor range is $1856.70 to $1780.60. Its 50% level at 1818.70 is another potential upside target. It forms a resistance cluster with $1819.00.
Short-Term Outlook
With the exception of six days in mid-to-late January, April Comex gold has been rangebound for over a month with $1782.50 – $1758.80 support and $1819.00 to $1833.90 resistance.
However, the chart pattern inside $1782.50 to $1819.00 indicates an upside bias may be developing. Friday’s price action was impressive, especially since it led to a change in trend to up. Nonetheless, buyers still have to take out $1833.90 with conviction to trigger a potential acceleration to the upside.
The longer the market stays in a trading range, the greater the expected size of a breakout.
For a look at all of today’s economic events, check out our economic calendar.
This article was originally posted on FX Empire
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