Gold Edges Sideways and Momentum Paralyzes

Gold has adopted a horizontal trajectory around its directionless 50- and 100-period simple moving averages (SMAs). The Ichimoku lines are also conveying the commodity’s inert demeanour and are demonstrating that directional momentum has dried up.

The short-term oscillators are transmitting conflicting signals in price sentiment. The MACD, has barely slid beneath its red trigger line, which has fused with the zero threshold, while the positively charged stochastic oscillator, is promoting improvements in the price. The RSI is currently tackling its neutral 50 level and has yet to convey any clear directional backing for the price of the commodity.

If buyers steer the pair over the 50-period SMA and the blue Kijun-sen line around 1,737, early upside constraints could develop from the region of 1,743-1,747. Overstepping this boundary could lift confidence, however, in order to enhance the commodity’s bullish tone buyers would need to guide the price above the capping resistance section of 1,756-1,760, which is reinforced by the 200-period SMA overhead at 1,762. Successfully doing so, the bulls may then challenge the succeeding boundary of 1,776 – 1,783.

To the downside, an initial support zone – containing the 1,719 nearby low – could arise from the 100-period SMA at 1,724 until the cloud’s lower surface around 1,715. Managing to clearly dip under the cloud, the bears may then meet the minor consolidation’s floor of 1,696 – 1,700. Diving from here, the price may revisit the 9-month low of 1,677 before sellers target the 1,660 – 1,670 region of support.

Summarizing, in order for gold’s bullish picture to progress, the price would need to surpass the range’s ceiling of 1,756-1,760. Likewise, a plunge below the 9-month low of 1,677 may intensify bearish pressures.