Commodities

Technical Analysis – Gold shines near six-year high; rally could stall but not end

Posted on June 24, 2019 at 9:13 am GMT

Christina Parthenidou, XM Investment Research Desk

Gold bulls got extra energy on Friday, driving the price towards an almost six-year high of 1,411. Downside corrections are likely in the very short term as the stochastics are set for a bearish cross above 80 overbought mark. The MACD however, has yet to show any sign of weakness, an indication that any slowdown in the market may be short-lived.

Slightly higher, the 50% Fibonacci ratio of 1,421 of the three-year old downleg from 1,796 to 1,046 could prove a trigger point for another bullish round if breached successfully. Such a move would shift all the attention towards a stronger barrier around 1,520.

The 1,400 level is currently working as an immediate support to downside movements. Falling aggressively below that number, the next stop could be within the 1,365-1,356 former resistance zone, while even lower the market may be exposed to the 38.2% Fibonacci of 1,332 and the 1,325 mark.

In the bigger picture, the recent gains turned the market strongly bullish as well. The positive slope in the 50-day simple moving average (SMA) suggests that the bright outlook may not fade soon.

In brief, gold is trading in the green both in the short- and the long-term, eyeing a key resistance around 1,421 in coming sessions.

commodities gold

Legal disclaimer: The material does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instruments. XM accepts no responsibility for any use that may be made of these comments and for any consequences resulting in it. No representation or warranty is given as to the accuracy or completeness of this information. Consequently, any person acting on it does so entirely at their own risk. The research and analysis does not involve any specific investment objectives, financial situation and needs of any specific person who may receive it.

It has not been prepared in accordance with legal requirements designed to promote the independence of research, and as such it is considered to be marketing communication. Although we are not specifically constrained from dealing ahead of the publication of our research, we do not seek to take advantage of it before we provide it to our clients. We aim to establish, maintain and operate effective organisational and administrative arrangements with a view to taking all reasonable steps to prevent conflicts of interest from constituting or giving rise to a material risk of damage to the interests of our clients. We operate a policy of independence, which requires our employees to act in our clients’ best interests and to disregard any conflicts of interest in providing our services.

CFDs are leveraged products. CFD trading may not be suitable for everyone and can result in losing all of your invested capital, so please make sure that you fully understand the risks involved.