Gold consolidates after failing to re-enter range
2023.07.10 05:13
Gold had been moving sideways for more than a month, but the bears managed to push the price below the lower boundary of that range. Even though bullion posted a mild recovery after bouncing off the three-month bottom of 1,893, its attempts to re-enter the neutral pattern have been repeatedly repelled around the 1,925 mark.
The short-term oscillators currently suggest that the positive momentum is picking up, but bearish forces retain the upper hand. Specifically, the MACD crossed above the red signal line in the negative zone, while the stochastic oscillator is set to post a bullish cross.
If bullish pressures persist, the lower end of the rangebound pattern at 1,925 might be the first barrier for the bulls to clear. Piercing above that wall, the price could face the restrictive trendline that connects the recent lower highs before it challenges the upper boundary of the tight range at 1,985. Should that barricade fail, traders could eye the crucial 2,000 psychological mark.
On the flipside, bearish actions could push the price towards the recent three-month low of 1,893. Should that floor collapse, the spotlight could turn to the March resistance of 1,857, which lies very close to the 200-day simple moving average (SMA). A violation of that region could pave the way for the 2023 bottom of 1,804.
Overall, gold seems unable to edge higher after testing multiple times the lower boundary of the rectangle pattern. Hence, a failure to reclaim that crucial territory could trigger a significant retreat.
