Gold is holding a negative bias in the short-term as prices approach the June 26 low of 1235.74. The market has been making lower highs and lower lows since falling from the June 6 peak of 1295.97.
The 20-period moving average has crossed below the 50-period MA, giving a bearish signal. The short-term moving average is pointing down, highlighting the bearish view. Meanwhile, the RSI is below 50 in bearish territory, indicating there is a negative bias in the market. The oscillator has not crossed below 30, so gold is not oversold yet, leaving room for further downside.
The immediate target is the June 26 low of 1235.74. Breaking below this level would extend the downside move towards 1226.42 as the next support level. This was an area of congestion in the past. The next main support is located at the May 9 low of 1214.17
Overall, downside pressure is expected to remain strong in the near term as long as the market is trading below the 50-perdiod MA. Only a move above 1248.14 would weaken the bearish bias. This level is an important resistance area as it provided both resistance and support in the past. This is also where the 50-period MA converges. The next main resistance level comes in at 1258.73, a previous high (June 23) and also a support level in the past.
A move above the June 14 high of 1280.82 would cancel the short-term bearish view and this would open the way to re-test the June 6 high of 1295.97. From here, there is scope to resume the uptrend that took place from 1214.17 to 1295.97.