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Gold Snags Necessary Footing for Retest of Range’s Ceiling

Gold recently established some positive traction off the converged simple moving averages (SMAs) and the Ichimoku cloud’s upper surface, after failing to previously clear the resistance band of 1,756-1,760. Currently the SMAs do not confirm a commanding price direction, however, the rising 50-period SMA is aiding the latest positive sentiment in the commodity.

Likewise the Ichimoku lines are unclear of price direction and are demonstrating a state of evaporated directional impetus. Nonetheless, the oscillators are conveying mixed signals in short-term momentum. The MACD has nudged back above its red trigger and zero lines, while the falling RSI is flirting with the 50 level. Furthermore, the bearish stochastic oscillator suggests the price is skewed to the downside.

In the negative scenario, a key congested support zone from the 50-period SMA at 1,738 until the 1,723 trough could attempt to revive upside momentum. However, if the 1,723 barrier and the Ichimoku cloud’s lower frontier at 1,718 fail to overturn sellers’ efforts to descend, the price may then steer towards the 1,706 neighbouring low.

Alternatively, if buying interest intensifies, early limitations may stem from the 1,749 high and the curbing roof of the sideways market from 1,756 to 1,760. In the event buyers conquer this vital border, the price may catapult towards the resistance section of 1,776-1,783. Piloting over this too could result in buyers trying to recapture the 1,801 and 1,806 highs.

Summarizing, gold remains range bound between the hardened floor of 1,677 and the heavy ceiling of 1,760. Yet, with a glut of support obstacles blurring the downside, the positive picture could begin to dominate.

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