Gold prices have been trading around the 38.2% Fibonacci retracement level of the up leg from 1,451 to 2,074.89 at 1,836 and the 20-day simple moving average (SMA) and have been in a descending channel since August 6.
According to the technical indicators, the stochastic oscillator is dropping towards the oversold area, while the RSI is pointing slightly down in the negative territory. The moving averages are in a neutral-to-bearish mode, suggesting that the next move in prices looks more likely to be down than up.
More losses could take the yellow metal until the 50.0% Fibonacci retracement level of the up leg from 1,451 to 2,074.89 at 1,763, while steeper decreases could challenge the 1,704 support, breaking the channel to the downside. Marginally below this level, the 61.8% Fibonacci at 1,690 would come next ahead of the 1,667 support.
On the other side, an upside wave above the 40-day SMA could hit the 1,900 psychological mark before meeting the 100-day SMA at 1,910. A penetration of the upper bound of the range could meet the 23.6% Fibonacci at 1,928 and the 1,965 resistance. Above that, the 2,015 barrier could halt bullish actions.
Overall, gold prices are negative in the short- and medium-term timeframes.
