HomeContributorsTechnical AnalysisGold Finds Obstacle Near 1,287, Indicator Suggest Bearish Bias

Gold Finds Obstacle Near 1,287, Indicator Suggest Bearish Bias

Gold prices had another touch of the 1,287 resistance level today, remaining above the 23.6% Fibonacci retracement level of the descending movement from 1,346.60 to 1,266 near 1,285 and is standing within the Ichimoku cloud in the 4-hour chart.

The RSI and the stochastic oscillator signal that the next move in the price is more likely to be on the downside as the former is negatively sloped above its 50 neutral mark and the latter continues to weaken slowly in the overbought zone, recording a bearish crossover within its %K and D% lines.

A cross under the 1,285 barrier could be discouraging, and may give the green light for a steeper decline towards the bullish cross between the 20- and 40-period simple moving averages (SMAs) near the 1,279 support level. Should the bears beat this level, the strong 1,273 support may be another level to focus on.

Alternatively, for investors to resume a strong buying interest, the yellow metal would need to stage a descent rally above the 1,287 resistance. Another key barrier is also located around 1,293 taken from the inside swing bottom on May 15, while higher the bulls would have to fight harder to overcome the 38.2% Fibonacci of 1,297.

In the very short-term picture, the sentiment is turning bearish as the indicators signal negative correction. However, the distance between the price and moving averages could be also a sign for caution as they posted bullish cross. Traders may need to see a climb above 1,287 for bullish actions.

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