Gold adds 3% after the bounce off 1805

Gold prices added more than 3% after the bounce off the 1,805 support level, moving within the Ichimoku cloud. The RSI is flattening above the neutral threshold of 50, while the MACD is jumping above its trigger line in the negative region. Also, the 200-day simple moving average (SMA) is moving sideways, suggesting a neutral bias in the medium-term.

If the market continues to move north, then the price may flirt with the 23.6% Fibonacci retracement level of the upward wave from 1,616 to 1,960 at 1,880, which overlaps with the 50-day SMA. More gains could lead the price until the 1,890 resistance and the previous peak of 1,960, registered on February 2.

However, if the bears take control, the yellow metal could drive towards the 38.2% Fibonacci at 1,830 before meeting 1,805 again. Below these lines, the 50.0% Fibonacci of 1,788 and the 200-day SMA at 1,775 may pause the decline towards the 61.8% Fibonacci of 1,747.

All in all, gold is trying to recoup some losses, but the price needs to overcome the 50-day SMA to post more positive movements.

About the author

Melina Deltas

Melina joined XM in December 2017 as an Investment Analyst in the Research department. She can clearly communicate market action, particularly technical and chart pattern setups. Her technically focused method looks mainly at price action across multiple time frames to capture big moves that develop over the years. She has more than 3 years of experience in analyzing financial markets, specializing in forex, indices, and commodities. Melina studied Pure Mathematics at Lancaster University and has a Master's Degree in Monetary and Financial Economics from the University of Cyprus. Currently, she is an associate member of the Society of Technical Analysts (STA) and a Certified Financial Technician (CFTe).