- Gold jumped to new highs last week
- Overall trend remains positive
- But RSI and stochastic suggest bearish correction
Gold prices climbed to a high of 2,144.60 last week before falling. The price has been clearly on an uptrend since October 2022, and the long-term structure of rising highs and rising lows is still in place.
On the weekly chart, the technical oscillators are reflecting the most recent market retreat. While the Relative strength index (RSI) is moving lower in positive territory, the stochastic is maintaining its downward trend following the bearish crossover between its %K and %D lines.
It may retest the all-time high of 2,144.60 if buyers regain control and break over the 2,079 resistance level, which is derived from the April 30 highs. With more positive moves, the price would enter unknown territory and shift attention to round psychological numbers, where traders might set stop-loss orders, creating barriers for further increases. Thus, the 2,200 and 2,300 areas would be the levels to keep an eye on at the outset.
The 50-week simple moving average (SMA) near the 1,932 support level would be the initial downward barrier, should sellers maintain their control. If broken, the focus would shift to the 100-week SMA at 1,870, and a subsequent decline to the 200-week SMA and the long-term rising trend line, both near 1,835, would be next.
To sum up, the outlook in the long-term picture is still strongly positive. To cast doubt on that, a clear break below the uptrend line is required, however substantially steeper drops would be necessary for a trend reversal.