- Gold violates crucial trendline as geopolitical tensions increase
- Erases its October decline, marching to a fresh 2-month high
- Momentum indicators reach overbought levels
Gold has been in a steep uptrend after bouncing off its October low, jumping back above crucial technical regions such as the 200-day simple moving average (SMA) and the Ichimoku cloud. Although the short-term oscillators are hinting that the advance is overstretched, fresh geopolitical concerns may add more fuel to the latest rally.
Should buying interest persist, the recent two-month peak of 1,962 could curb bullion’s upside. Conquering this barricade, the bulls might aim at the July high of 1,987. A break above that region could bring the 2,000 psychological mark under examination.
On the flipside, bearish actions could send the price to revisit the September support of 1,901, which overlaps with the 50-day SMA. Failing to halt there, gold may descend towards the August low of 1,885. Should that barricade also fail, the spotlight could turn to the September 2022 resistance of 1,857 that could serve as support in the future.
All in all, gold seems to be under relentless upside pressure, which has pushed the price near overbought levels. Can the bears strike back?