Gold plunged towards a fresh five-week low of 1,831, continuing the strong selling interest of the ten-month peak of 1,960. The RSI is diving towards the oversold territory with strong momentum and the MACD is losing ground beneath its trigger and zero lines. In trend indicators, the 20- and the 50-period simple moving averages (SMAs) are following the descending move in price action.
Further declines may meet support around 1,825, taken from the lows on January 15, while even lower the price may hit the end of December’s trough of 1,797, which could attract traders’ attention.
On the upside, resistance could occur around the 1,843 barrier before testing the 20- and the 50-period SMAs at 1,857 and 1,868 respectively, which stands near the previous peak of 1,870. Higher still, the 200-period SMA at 1,890 would increasingly come into scope, while just above this point lies the psychologically significant level of 1,900, a break of which could shift the bias to a positive one.
The medium-term picture continues to look predominantly bearish, with trading activity taking place below both the 50- and 200-period SMAs.
