Gold peaked at 1357.47 last Friday before retreating. Short-term momentum, as measured by RSI, reached overbought levels above 70 last week, with gold subsequently slipping below 1340 support today.

On the 4-hour chart, RSI has dipped below 50. While this is a bearish signal, the possibility of further upside in gold cannot be ruled out yet. The stochastic fell from 80 to below 20, indicating the market is oversold now. A consolidation phase for gold is expected in the near term.

In the short term, range trading is expected between 1330 and 1340. Continued weakness below the 20-period moving average could see prices head lower. But as long as support at 1330 holds strong, a neutral bias seems the most likely prospect for now.

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A break below the 50-period SMA at 1330 would shift the focus towards the key psychological level at 1300. From here, there is scope to slip down to 1280 and 1255.

A successful break above 1340 would increase the prospects for a move higher to re-test the 1357.47 peak. Clearing this top would see the bull trend continue with scope for extending towards the next major peaks at 1367.23 and 1375.13.

For now, momentum is weak, suggesting little impetus for a break out of the range between 1330 and 1340. The short-term picture is neutral to bullish. There are no clear signals for a reversal in the uptrend as the moving averages are positively aligned. A fall below 1280 would change the short-term bullish picture.

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