Commodities

Technical Analysis – Gold develops in consolidation area; indicators signal bullish move

Posted on July 8, 2019 at 8:20 am GMT

Melina Deltas, XM Investment Research Desk

Gold prices have been trading within a congestion area over the last two weeks with the 1,439 resistance as the upper boundary and the 1,382 support the lower boundary. Despite the sideways move, the technical indicators are suggesting an upside tendency in the 4-hour chart. The stochastic oscillator is moving higher and the RSI is sloping upwards approaching the 50 level.

In the event of an upside reversal, the 20- and 40-period simple moving averages (SMAs) could be significant obstacles for the yellow metal at 1,407 and 1,413 respectively. If there is a successful attempt to climb above these levels, the price could rest near the 1,424 resistance. A run above this level would push the yellow metal until the six-year high of 1,439.

In case of further losses below the immediate support of the 23.6% Fibonacci retracement level of the upward movement from 1,266 to 1,439, the way could open for the 1,382 area. A decrease below this significant barrier would shift the neutral bias to bearish and meet the 38.2% Fibonacci of 1,373.

Overall, for a resumption of last month’s bullish rally, gold prices would need to beat the six-year high. Alternatively, for a decline to take place, 1,382 would need to be penetrated.

commodities gold

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