Technical Analysis – Gold rally in question
Gold is lower today, but close to recent highs
Geopolitics and dollar underperformance support gold
Momentum indicators are tentatively bullish
In the meantime, the momentum indicators are tentatively bullish. The RSI remains above its midpoint but shows little appetite for a move higher. Similarly, the Average Directional Movement Index (ADX) is hovering a tad above its 25 midpoint and thus pointing to a muted bullish trend in gold. More importantly, the stochastic oscillator has crossed above its moving average (MA) and it is currently moving towards its overbought territory.
Should the bulls remain hungry, they could try to keep gold above the recent rectangle and the April 12, 2024 high at 2,431, and then gradually stage a move, which might not be as straightforward as it sounds, towards the all-time high of 2,484.
On the flip side, the bears are keen for the current correction to pick up speed. They could try to push gold below the 2,431 level and then have a go at overcoming the support set by the 50-day simple moving average (SMA) at 2,376. If successful, they could then lead gold towards the busier 2,340-2,351 range, which is populated by the 100-day SMA and the 161.8% Fibonacci extension of March 8, 2022 – September 28, 2022 downtrend.
To sum up, gold is in the red today, and increasing risk appetite is most likely needed for gold bears to retake market control.Related Assets
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