Gold struggles for direction after advance pauses
2023.03.27 04:41
Gold has experienced significant gains since early March mainly due to the turmoil observed in the global banking sector. Even though bullion posted a fresh one-year high of 2,010 in the previous week, it quickly retraced lower and has been moving sideways for the last few daily sessions.
The short-term oscillators currently suggest that bullish near-term forces are subsiding but remain in control. Specifically, the MACD histogram is softening but holds above zero and its red signal line, while the RSI is ticking downwards above its 50-neutral mark.
If the positive momentum fades and the price moves to the downside, the February resistance region of 1,959 could act as immediate support. Diving lower, the price could descend to challenge the recent low of 1,933. Should that barricade fail also, the 1,885 hurdle, which overlaps with the 50-day simple moving average (SMA), might provide downside protection.
Alternatively, should gold resume its short-term advance, the bulls could initially aim at the crucial 2,000 psychological mark. A violation of that region may open the door for the one-year high of 2,010. Failing to stop there, further advances could then cease at the March 2022 high of 2,070 registered after Russia’s invasion of Ukraine.
Overall, gold seems to be stuck in a rangebound pattern after its recent rally came to a halt. Hence, a break above the 2,010 ceiling is needed to revive bulls’ hopes for the continuation of gold’s uptrend.
