Commodities

Technical Analysis – Gold edges sideways; negative pressures dwindle

Posted on September 2, 2020 at 9:22 am GMT

Anthony Charalambous, XM Investment Research Desk

Gold has bounced on the Ichimoku cloud’s upper surface, while the simple moving averages (SMAs) converge slightly beneath. The recent weakness from the 1,992 barrier appears to be receding as the Ichimoku lines stabilise. Nonetheless, the SMAs and the Ichimoku cloud continue to dictate a neutral demeanour that has grasped the commodity for the last two weeks.

The oscillators suggest mixed signals of directional momentum. The MACD is weakening in the positive region, slipping below its red signal line. Yet, the RSI has bounced on its 50 threshold, while the stochastic oscillator has turned bullish, both promoting improvement in positive momentum.

If upward action resumes, initial resistance may commence from the red Tenkan-sen line at 1,975 and the 1,980 level, that being the 23.6% Fibonacci retracement of the up leg from 1,670 to 2,074, ahead of the 1,992 high. Another run up may test the nearby 2,016 boundary. If buyers persist, the price may target the 2,050 and 2,062 peaks, neighbouring the all-time-high at 2,074.89. Conquering this and pushing into unmapped territory, buyers may then turn their focus towards the 2,100 handle.

Alternatively, sellers face immediate fortified support from the ceiling of the cloud at 1,952 until the 200-period SMA at 1,947. This zone also includes the 100- and 50-period SMAs plus the blue Kijun-sen line. Succeeding in diving below the cloud, the key 1,902 – 1,910 section of troughs may attempt to apply the brakes on the decline. Should further losses unfold, the price may sink to meet the 50.0% Fibo of 1,873 and the crucial 1,863 trough.

Summarizing, the commodity bears a neutral-to-bullish bias above the SMAs and the cloud. A break either above 1,992 or below 1,902 could set the next clear course.

gold

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