Gold’s new-found confidence today broke above the Ichimoku cloud confirming the bounce off the lower band of the cloud and the 100-period simple moving average (SMA). Boosting this climb is the bullish crossover within the Ichimoku lines and the upward slopes of the SMAs.
Moreover, the short-term oscillators suggest further gains for now, with the MACD increasing above zero and its red trigger line and the RSI nearing the 70 level. Additionally, the stochastics are in the overbought territory, holding onto their positive tone.
If buying interest persists, initial resistance could be found at the 1,739 high of April 16 ahead of the 88-Month peak of 1,746.95. A step over this top may see the 1,754 overhead barrier come into play before shooting for the 1,775 hurdle from October of 2012 and the 1,800 vicinity.
Otherwise, should the price turn back down, an initial strengthened support section from 1,707-1,698, which encompasses the 50-period SMA and the red Tenkan-sen line, could deter the move. Dropping further may encounter the 23.6% Fibo of 1,678 – coinciding with the lower band of the cloud – before reeling down to the 100-period SMA at 1,667 and the 1,660 trough beneath. Sustained efforts from sellers could extend the yellow metal to challenge the 1,643 trough and 38.2% Fibo of 1,636.
Overall, the precious metal seems to be making gains in the short-term while a close above 1746.95 may also boost the medium term positive outlook.
