Sat, Jan 22, 2022 @ 09:17 GMT
HomeContributorsTechnical AnalysisGold Muted Between Key Boundaries, Risk Skewed To The Downside

Gold Muted Between Key Boundaries, Risk Skewed To The Downside

Gold is stubbornly fighting the nearby 1,796 resistance for the fifth consecutive trading day, deriving strong support from the 50% Fibonacci of the latest upleg and the ascending trendline, which has been navigating the market since the drop to the five-month low of 1,680.

The technical picture, however, suggests a neutral-to-bearish bias at the moment as the MACD remains negatively charged below its red signal line, while the RSI is currently pushing efforts for an upside reversal, but it is still clearly below its 50 neutral mark. Also, the Stochastics have yet to crawl above their 20 oversold level despite pivoting.

Should the trendline at 1,778 crack, the price could initially test the 1,758 handle before heading towards the 61.8% Fibonacci of 1,745. Sliding lower, the 78.6% Fibonacci of 1,722 could prevent a sharper decline towards the 1,680 bottom.

In the positive scenario where the precious metal snaps the 1,796 barrier and closes above the 38.2% Fibonacci of 1,802, the next target would be the 23.6% Fibonacci of 1,830. Running higher, the bulls will need to drive beyond 1,845 to access the recent peak of 1,877.

As regards the medium-term outlook, gold is maintaining a neutral trajectory, hovering within the range of 1,916 – 1,680.

In brief, despite its resilience above 1,778, gold has yet to show any clear bullish signals, remaining exposed to downside corrections. A move below the aforementioned boundary could pressure the price to 1,758.

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