Gold prices started the week strongly on the back of negative US fiscal data and an unexpected cut in oil production by OPEC+, which by threatening rising fuel prices and inflation could signal further economic woes.

Kitco’s Jim Wyckoff said: “Gold is getting a boost from a downbeat US economic report, sharply higher crude oil prices, a lower US dollar index and a dip in US Treasury yields.

“Gold prices were up $21.00 to $1,990 per ounce. The weekend surprise OPEC+ cut in collective crude oil production by just over one million barrels a day is on the front burner of the marketplace to start the trading week.

“Meantime, the March US ISM manufacturing report showed activity dropped to the lowest level since May of 2020. The March factory activity reading of 46.3 was lower than both the prior reading of 47.7 and consensus estimate of 47.5.”

With prices moving in the range of $1,900 to $2,010 per ounce, technical market analyst Gary Wagner explained on Kitco the significance of the 480-minute bar chart of gold futures (June contract month).

“It highlights a Western technical chart pattern called a triangle. This pattern is composed of a lower ascending trend line which acts as support, and an upper descending trend line which forms the current level of resistance.

“Prices in this pattern will oscillate between the upper-level resistance trend line and the lower-level support trend line.

“During a bullish market scenario, you look for pricing to break above resistance, this typically occurs after multiple attempts to breach either the low or the high occurs with a breakout to the upside,” he said.

Kitco’s Wyckoff agreed the technical analysis pointed to a bullish short-term trend.

“Technically, April gold futures prices scored a bullish ‘outside day’. Bulls have the solid overall near-term technical advantage. Prices are still in an uptrend on the daily bar chart.

“Bulls’ next upside price objective is to produce a close above solid resistance at the March high of $2,014. Bears’ next near-term downside price objective is pushing futures prices below solid technical support at $1,900 per ounce.

“First resistance is seen at $2,000 per ounce and then at $2,014. First support is seen at $1,975.00 and then at [Monday’s] low of $1,950 per ounce,” he said.