Gold prices surged to a fresh seven-and-a-half-year high of 1,763.58 earlier today, shifting the outlook from neutral to bullish. The strong upside rally is confirmed by the technical indicators which are gaining momentum. The MACD recorded a bullish crossover with its trigger line in the positive area while the RSI is heading higher towards the overbought zone. Also, the short-term simple moving averages (SMAs) are continuing the price action, acting as critical supports.
In case of more positive movements, the market could meet the 1,795 resistance, taken from the peak on October 2012. Steeper increases could send the commodity towards the 161.8% Fibonacci extension level of the down leg from 1,703 to 1,454 at 1,857 and the 1,920 barrier, registered on September 2011.
On the other side, if there is a downside pullback, support could come from the 20-day SMA at 1,712, which overlaps with the blue Kijun-sen line, before flirting with the 40-day SMA at 1,680. Below that, the 1,660 support inside the Ichimoku cloud is coming next. Moving lower, the lower surface of the Ichimoku cloud at 1,598 and the 1,565 obstacle could attract attention.
All in all, gold prices are in a bullish mode after today’s new peak in the short-term and medium-term outlook.
