Commodities

Technical Analysis – Gold appears to be gaining confidence

Posted on May 4, 2020 at 6:45 am GMT

Anthony Charalambous, XM Investment Research Desk

Gold is currently resting at the mid-Bollinger band around 1,700 while still confined between the boundaries of 1,660 and 1,739. The short-term oscillators further reflect a neutral-to-bullish bias, while the rising simple moving averages (SMAs) continue to be positively charged suggesting further advances to come.

The MACD and the RSI display the pause in the market. The MACD, deep in the positive region, has dipped below its red trigger line but appears to be flattening, while the RSI, bouncing near its neutral threshold, is hovering slightly above it. Turning to the stochastics, they suggest some improvement ahead, as the blue %K line has completed a bullish crossover of the red %D line.

To the upside, initial resistance could come from the 1,722 high of April 30 ahead of the tough border of 1,739. Pushing above that, the bulls face a strengthened resistance region from the multi-year high of 1,746.95 to the 1,754 obstacle – which also encompasses the upper Bollinger band. Surpassing these barriers, the bulls may shoot for the 1,775 high from October of 2012.

Otherwise, if sellers steer below the mid-Bollinger band, first limitations could come from the 1,678 level, which is the 23.6% Fibonacci retracement of the up leg from 1,455.17 to the 88 ½-month high of 1,746.95. Subsequently, the 1,669 and 1,660 lows may confine declines towards the support section from the lower Bollinger band at 1,649 till the 38.2% Fibo of 1,635, including also the 1,643 tough trough and the 50-day SMA.

Summarizing, although neutral-to-bullish in the very short-term and positive in the medium-term timeframe, the commodity is still enclosed between the 1,739 and 1,660 borders.

gold

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