Gold experienced a remarkable surge since early March, breaking above its bullish pennant formation to post a fresh one-year high of 2,032 in the previous week. However, bullion quickly retraced lower and fell back below its 2,000 psychological mark but the bulls have not surrendered yet.
The short-term oscillators currently suggest that the positive momentum is waning, but buyers remain in control. Specifically, the RSI is ticking downwards above its 50-neutral mark, while the stochastic oscillator is retreating after posting a bearish cross in the overbought zone.
If bullish pressures fade completely and the price moves to the downside, the February resistance region of 1,959 could act as initial support. Dipping beneath that zone, gold could descend to challenge 1,933 before the 1,885 hurdle appears on the radar. Should that barricade fail, the 2023 low of 1,804 could provide downside protection.
Alternatively, should gold attract further buying interest, the bulls could attempt to reclaim the 2,000 psychological mark. A break above that crucial level might pave the way for the one-year high of 2,032. Failing to stop there, further advances could cease at the March 2022 high of 2,070 registered after Russia’s invasion of Ukraine.
Overall, gold has been experiencing a downside correction in the past few daily sessions, hinting that its recent advance could be overstretched. This pullback could extend in the case that the 2,000 psychological mark acts as a strong ceiling.
