Technical Analysis – Gold returns beneath 1,800 border

Gold’s negative forces are currently brawling with the support region between the mid-Bollinger band and the 1,790 barrier, being the 38.2% Fibonacci retracement of the up leg from 1,718 until 1,834, after buyers lost their lead slightly above the 1,800 handle. The pair is demonstrating fresh consolidation between the 1,780 mark and the 23.6% Fibo of 1,807 following the decline from the 1,834 peak, something also being reflected in the simple moving averages (SMAs).

The short-term oscillators are conveying mixed signals in directional momentum. The MACD is a tad above its red signal line and has nudged over the zero level, while the RSI is diving in bearish territory. The stochastic oscillator is also endorsing downward price action in the pair with its strong negative charge.

If sellers manage to steer the pair below the current support section of 1,790-1,795, which encapsulates the 200-period SMA as well, the price may then target the lower Bollinger band and the adjacent support base formed between the 50.0% Fibo of 1,776 and the 1,780 barrier. Should selling interest intensify, a border could then develop from the 1,766 obstacle until the 61.8% Fibo of 1,762, which could possibly draw the bears' attention.

In a positive scenario, buyers may encounter an initial tough resistance from the 50-period SMA at 1,802 until the 23.6% Fibo of 1,807. Propelling past these congested obstacles, the price may pilot towards the 1,821 inside swing low from September 6 before challenging the ceiling of 1,827-1,834, which has curbed advances since July 15.

Summarizing, gold is exhibiting a neutral tone and a break either below 1,776 or above 1,807 could result in a bigger price move materializing.

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