Gold prices are firmer after rebounding off a 5-month low of 1236.49 last week but remain stuck in a range between 1250 and 1260 during the past few trading days. The flat RSI on the 4-hour chart is indicative of no clear direction in the market.
Risk though is tilted to the upside as prices are trading in the upper half of the Bollinger Band. Also, gold has crossed above the 50-period MA, strengthening the prospects for more upside in the near term.
But prices are nearing a resistance zone between 1259 and the 1261.82 high. A sustained move higher would open the way to target the key 1270 level, which would result in a shift to a bullish phase.
Caution is needed as the 50 and 200-period moving averages are bearishly aligned. Gold’s inability to break out of its current range and rally higher in the near-term may increase the risk of falling below 1250 with scope to re-test the 1236.49 low.
