Gold had been trading within a descending channel for the most part of 2022 but has managed to stage a moderate rebound since early November. Even though the precious metal has crossed above both its 50- and 200-day simple moving averages (SMAs), its advance seems to be running out of juice.
The momentum indicators are reflecting a loss of positive momentum. Specifically, the MACD histogram is retreating below its red signal line in the positive region, while the stochastic oscillator is pointing downwards after posting a bearish cross.
If selling forces intensify and the price slips below its 200-day SMA, the recent low of 1,774 could curb initial declines. Should that floor collapse, bullion could descend to test the November support of 1,726. Failing to halt there, the 1,702 barrier may prove to be a tough one for the price to violate.
To the upside, bullion could ascend towards the six-month high of 1,824, which has rejected its advance twice. Breaching this region, the bulls might aim for the June peak of 1,880 before the spotlight turns to the 1.920 hurdle. A break above the latter could send the price to challenge the 2,000 psychological mark.
Overall, gold appears to be losing upside momentum but remains comfortably above its 200-day SMA. Hence, a dip below that crucial level could ignite further downside pressures.
