Commodities

Technical Analysis – Gold moves sideways, sellers still eye lower levels

Posted on November 25, 2019 at 9:50 am GMT

Anthony Charalambous, XM Investment Research Desk

Gold sellers are attempting to steer past the recent swing low of 1456 to put the asset back on a negative track. Despite the rebound off 1446 – which is the 38.2% Fibonacci retracement of the up leg from 1266.20 to 1556.92 – and the consolidation in price, the 200- and 100-day simple moving averages (SMAs) still suggest the commodity could lose further ground.

The short-term oscillators lean towards the negative picture even though the market seems to have paused. The MACD is in the negative zone and below its red trigger line, while the RSI is declining in bearish territory. Moreover, the ADX echoes a strong negative trend in place.

If sellers pick up and manage to decisively penetrate below 1456, the precious metal could next find significant upside pressure from the 38.2% Fibo of 1446. Overcoming this, the price could drop to test another tough support level of 1434, being the high of August 2013.

To the upside, if buyers manage to reverse the price above the 1459 level, initial downside pressure could come from the 50-day SMA at 1467. Advancing, a more important resistance region of 1473 to 1479, involving fresh swing highs and encapsulating the 100-day SMA, may challenge the bulls. Climbing higher, the 200-day SMA at 1484 could halt further gains to test the 23.6% Fibo of 1488, the high of 1494 and the 1500 handle.

Overall, the short-term bias looks neutral-to-bearish and a break below 1446 would strengthen the bearish bias. However, a shift back above 1479 could return the bias back to neutral.

commodities gold

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