Gold Decreases Sharply after the Spike to New 19-month Peak

Technical analysis of Forex market

Gold prices started the day with a positive gap, but they quickly declined lower, unable to re-challenge the 19-month high of 1,974. The RSI indicator is showing some positive signs as it is pointing upwards in the bullish region; however, the MACD is approaching its trigger line for a bearish cross above its zero level.

In case there are steeper declines the next immediate support could come from the 1,877 barrier and then from the 20-day simple moving average (SMA) at 1,859 ahead of the 1,853 support level. More downside pressures could visit the 40-day SMA at 1,837 and the 200-day SMA at 1,808, which encapsulates the long-term ascending trend line and the Ichimoku cloud. Any moves below these obstacles could open the window for a bearish market in the short-term view.

On the other hand, a climb above the strong resistance at 1,916 could take the bulls until the 1,960 barrier, taken from the peak on January 2021 before meeting again the 19-month top of 1,974. Above these hurdles, the next stop could come from the 1,991 mark, registered in August 2020.

All in all, the yellow metal is creating a negative move after the aggressive spike towards the multi-month high in the previous week. However, the broader picture is still bullish and only a fall below the 200-day SMA and the uptrend line may change this view.