Gold reached a more than a four-month high of 1344 during the past week, after an aggressive bullish rally from the 1236 support level. However, over the last two daily sessions, the price bounced off on the aforementioned resistance obstacle and posted a bearish move. The short-term technicals seem to be negative and point to more weakness in the market.
Having a look at the short-term chart, the RSI indicator plunged below the overbought area, whilst the MACD oscillator is ready to create a bearish crossover with its trigger line in the positive territory, signaling** for further losses.
Upside moves are likely to find resistance at 1344. Clearing this key level would see additional gains towards the 1357 barrier, which is near the upper boundary of the weekly symmetrical triangle.
On the flip side, further losses should see the support of 1305 as this is also where the 20-day simple moving average is currently converging. A drop below the 20-day SMA would reinforce the bearish structure in the short-term and open the way towards the next key level – the 40-day SMA at 1288.
As a side note, in the long-term timeframe, the price has been developing within a symmetrical triangle over the past two years as it failed to post a higher top from 1,375 on June 2016. The price failed to extend its gains above the aforementioned level and has been creating a continuation pattern, indicating a breakdown as the previous tendency was a descending move.
