Gold Falters Around 1,900 Mark, Bullish Mood Dubious

Gold in the previous trading session transmitted a bearish reversal message around the 1,900 price hurdle, following a three-week rally from the 1,780 trough. The hanging man candle formation is receiving credence with the subsequent negative candle, which until now has failed to close higher than the 1,900 barrier. However, the bullish 50- and 100-day simple moving averages (SMAs) and the near completion of a positive overlap of the 200-day SMA by the 100-day one, suggests more advances in the precious metal are still on the table.

The rising Ichimoku lines are indicating that positive forces have yet to fully abate, while the short-term oscillators are hinting of weakness in upside momentum. The MACD, some distance in the positive region, is slowing a tad above its red trigger line, while the RSI is sliding from the 70 overbought level. Furthermore, the stochastic %K line has dipped a bit in the overbought territory.

If the commodity’s price continues to fade from the 1,900 vicinity, preliminary support could commence from the 1,869-1,880 zone. In the event the price attempts to retrace even further, the approaching red Tenkan-sen line at 1,865 may interrupt the test of the 1,843-1,854 barricade. Now, should the latter obstacle also fail to dismiss negative pressures from gaining pace, the bears may then target a buffer zone extending from the 50-day SMA at 1,821 until the 1,800 hurdle.

Alternatively, if buyers re-emerge, instant upside constraints could emanate from the 1,900 border followed by the 1,908-1,917 resistance ceiling, shaped by the rally peaks around the end of May and early part of June 2021. Successfully conquering this limitation may feed the haven appeal of the yellow metal, possibly propelling the price towards the 1,960-1,974 resistance section. If bullish pressures persist and overstep the 1,960-1,974 deterrent, linked to the rally peaks from September 2020 and January 2021, the 1,992 high could then draw traders’ focus.

Summarizing, gold’s medium-term neutral bias is exhibiting a growing bullish tone and a bullish breakout above the 1,908-1,917 ceiling could see gold shine again. That said, failure to close north of the 1,900 handle could spark worries about the latest rally in the commodity.