Commodities

Technical Analysis – Gold’s latest optimism looks to restart positive picture

Posted on April 6, 2020 at 7:41 am GMT

Anthony Charalambous, XM Investment Research Desk

Gold’s fresh confidence is currently pushing off the 1,607 level – that being the 61.8% Fibonacci retracement of the down leg from 1,703.36 to 1,451 – following the recent positive sessions which commenced on April 1 from 1,566. Backing an improving near- and medium-term picture are all the inclining simple moving averages (SMAs) as well as the short-term technical indicators.

The MACD has remained above zero and is expanding above its red trigger line, while the RSI is hovering above its neutral 50 mark. Moreover, the stochastics have turned up and seem to be headed for overbought levels.

Moving northwards, initial resistance could come from the 76.4% Fibo of 1,643, which coincides with the latest swing high. Overrunning this, the commodity could rally to the upper Bollinger band coupled with the inside swing high of 1,690 from February 24. With buying interest persisting, a revisit to the multi-year high of 1,703.36 could unfold before attention shifts towards the 1,723 obstacle from December 2012.

If sellers retake control turning below the 61.8% Fibo of 1,607, the 50-day SMA at 1,593 could be next to hinder the drop towards the 50.0% Fibo of 1,577, where the mid-Bollinger band also resides. Diving past the key swing low of 1,566, a support region from the 1,554 obstacle to the 38.2% Fibo of 1,548 – which encompasses the 100-day SMA – could halt further loss of ground towards the 200-day SMA, encapsulated between the 1,516 hurdle and the 23.6% Fibo of 1,510.

Summarizing, the near-term picture is positive above the 1,566 low and, with the aiding SMAs, a break above 1,643 would repower this bias.

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.