Gold prices are flirting with the nine-year high of 1,878 again, endorsing the strong bullish structure. The RSI indicator is pointing north in the overbought territory, while the MACD is extending its upside movement above its trigger and zero lines in the short-term timeframe. Furthermore, the simple moving averages (SMAs) and the Ichimoku indicators are following the price action up.
If the yellow metal strengthens its six-week bullish structure above the multi-year high of 1,878, it could touch the September 2011 high of 1,920. This could act as a tough resistance for the bulls, keeping the price away from uncharted waters.
On the flip side, a drop beneath the 1,864 support level could stabilize near the 20-period SMA currently at 1,840. Below that, the 23.6% Fibonacci retracement level of the up leg from 1,671 to 1,878 at 1,828 may come in defence. Lower, the market could revisit the 1,818 support and the 38.2% Fibonacci of 1,798, but first it may need to penetrate the Ichimoku cloud and the 100-period SMA.
In brief, the gold price is pushing for further gains with strong momentum near its new high. While downside corrections are possible, only a break below the 100-period SMA could worth of notice.
