Gold has been in a sustained downtrend after it failed to cross beyond the 1,857 region. Moreover, in the past few four-hour sessions, the price has dived beneath both 50- and 200-period simple moving averages (SMAs) and is currently battling with its lower Bollinger band, painting a gloomy short-term technical picture for bullion.
The momentum indicators are endorsing a bearish near-term bias. Specifically, the stochastic oscillator is descending in the oversold zone, while the MACD histogram is currently below both zero and its red signal line.
Should selling interest intensify further, the 1,805 crucial support could act as the first line of defence. Dipping beneath that region, the price may descend towards 1,792, which is the 123.6% Fibonacci extension of the 1,805-1,857 upleg. A violation of the latter could pave the way for the 161.8% Fibo of 1,772.
On the flipside, bullish actions might encounter initial resistance at the 61.8% Fibo of 1,825. Piercing through that ceiling, the bulls could then aim for the 38.2% Fibo of 1,837 before the 23.6% Fibo of 1,845 appears on the radar. Higher, the 1,857 peak could prove a tough obstacle for the price to overcome.
In brief, gold’s short-term picture appears to be deteriorating as the precious metal is trading below both its SMAs, while continuously marking fresh lower lows. For that tone to reverse, the price needs to profoundly jump beyond the 1,857 ceiling.