Commodities

Technical Analysis – Gold meets 100-SMA again; neutral bias

Posted on January 20, 2021 at 3:06 pm GMT

Melina Deltas, XM Investment Research Desk

Gold prices have been developing within a consolidation area over the last almost two-weeks with upper boundary the 1,863 resistance and the 100-period simple moving average (SMA) and lower boundary the 1,817 support level.

However, the technical indicators are not supporting this horizontal trajectory, but they are showing mix signals. The stochastic is standing in the overbought zone but is pointing down and the RSI is heading north in the positive area.

A successful climb above the 1,863 crucial level could take the yellow metal towards the upper surface of the Ichimoku cloud around 1,888 ahead of the 1,901 barrier. Even higher, the way could open for the 1,927 hurdle before touching the 1,959-1,965 highs from January 6 and November 9 respectively, increasing the buying interest in the short-term.

On the other side, if bears take control and move the price lower, support could come from 1,817 and 1,804. Underneath these obstacles, the 1,764 bottom could come next, taken from the low on November 30; continuing the bearish correction in the 4-hour chart.

Summarizing, the broader outlook in the short-term is negative, however, zooming in the last couple of weeks, the commodity the negative momentum has stalled within a trading range of 1,817-1,863.

gold

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