Gold’s recent withdrawal from 1,594 is tackling the uptrend line, drawn from 20 December 2019, and the 1,575 level – near the Ichimoku cloud – which is the 23.6% Fibonacci retracement of the up leg from 1,458.42 to 1,611.28. Moreover, the flattening of the Ichimoku lines reflects a pause in the market.
Although positive momentum has weakened, the improving picture looks to be intact, something also aided by the upward sloping simple moving averages (SMAs). The MACD is in the positive zone and barely above its red trigger line while the falling RSI is just above its neutral mark.
To the downside, sellers may immediately confront robust support arising from the vicinity of the uptrend line, the 23.6% Fibo of 1,575 and the Ichimoku cloud joined by the 50-period SMA at 1,572. Conquering this area, the 1,563 low coupled with the 100-period SMA could halt further declines towards the 38.2% Fibo of 1,553 and nearby swing low of 1,546. Clearing this, the 200-period SMA at 1,537 and 50.0% Fibo at 1,535 may move into the spotlight.
If buyers retake control and swing the yellow metal back up, the recent 1,594 high could apply the initial pressure. Surpassing this, the price may rally towards the almost seven-year peak of 1,611.28 before testing the 1,620-high back from 26 February 2013. If buying interest continues, the 1,629 level, which is the 123.6% Fibonacci extension of the down leg from 1,611.28 to 1,535, may draw focus.
Overall, the very short-term timeframe continues to appear bullish above the Ichimoku cloud and the 1,563 level, while a close below the 1,535 trough could only shift the near-term outlook to bearish.
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