Gold is in a tight range with the 1,780 – 1,770 zone as the quick bounce from the five-month low of 1,680 was not enough to pierce a former support region and the 20- and 50-day simple moving averages (SMAs). Notably, the surface of the descending channel, which lost some credence following May’s breakout, seems to be back into focus, acting as resistance again within the same region.
From a technical perspective, the signals are still confusing, providing little direction about the next move in the price. The RSI remains stuck below its 50 neutral mark, despite its recent fast upside reversal, while the MACD is also muted between its signal and zero lines. Meanwhile, the Stochastics are currently siding with the bears as the indicator is exiting the overbought area.
Should the bulls claim the 1,789 barrier, it would be interesting to see if the price can snap the 200-day SMA and close above the tough 1,833 resistance area. If that’s the case, the yellow metal could pick up steam to rechallenge the 1,900 – 1,916 wall.
Alternatively, if the bears win, driving the price below 1,770, the focus will immediately turn to 1,750, which has been acting both as support and resistance since March. Softly lower, some consolidation could take place around 1,722 before the door opens again for the 1,680 low. A decisive close below the latter stretch towards the 1,640 handle, while the 1,600 psychological level will also be closely watched in the event of an aggressive downfall.
In brief, gold is currently in neutral mode. A break above 1,780 or below 1,770 could navigate the market accordingly.
Written by Admin
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