Technical Analysis – Gold technical signals flash green; trendline in focus
- Christina Parthenidou
Gold shifted the spotlight to the descending trendline, which is connecting the all-time high of 2,079 from August 2020 with November’s 2021 peak of 1,877, following the break above the tough 1,830 ceiling.
The recent bullish double cross between the 20-day simple moving average (SMA) and the longer-term SMAs is promoting further progress in market trend, while the positive trajectory in the RSI and the MACD suggests an upside move in the price is more likely than a downside one.
Bullion, however, will need to successfully close above the resistance trendline and the 1,850 round-level to raise buying orders towards November’s top of 1,877. Running higher, the precious metal could face a critical test within the 1,900 – 1,916 region, a break of which would officially violate the long-term downtrend from the 2,079 record high, hopefully bringing the medium and long-term bulls into play as well.
Should the bearish scenario unfold, with the price pulling back below the 1,830 mark, the 20-day SMA could immediately attempt to block the way towards the 38.2% Fibonacci retracement of the 1,680 – 1,877 up leg at 1,800. Breaching the latter, the price will probably seek shelter around the 50% Fibonacci before it heads towards the long-term supportive trendline around 1,770. Failure to bounce here could see a more aggressive sell-off towards the 61.8% Fibonacci of 1,743.In brief, Gold's technical signals continue to flash green despite its latest stabilization, with buyers eagerly waiting for a sustainable move above the resistance trendline and the 1,850 number to further raise exposure in the market.
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.