Commodities

Gold consolidates above short-term SMAs; neutral bias

Gold is successfully surpassing the 20- and 40-day simple moving averages (SMAs), which were ready to create a bearish crossover; however, the latest upward move drive the SMAs higher. The price appeared to be neutral over the last month and it is now consolidating within 1,920, which is the 38.2% Fibonacci of 1,680-2,070.40 and the 1,968 resistance.

The RSI indicator is slightly pointing down in the positive territory, while the MACD is losing momentum below its trigger line.

Immediate resistance to further gains would likely come from the 1,968 barrier. This is also near the 23.6% Fibonacci of 1,978, which holds near the blue Kijun-sen line of the Ichimoku indicator. If there is a break above this area, further resistance could be met around the 19-month high of 2,070.40.

If, however, the upside momentum were to lose steam and if the pair were to reverse lower, support would initially come from the 20- and 40-day SMAs at 1.933. Slipping below this line could take prices towards the 38.2% Fibonacci of 1,920 and the 1,915 support. Failure to hold inside the short-term trading range,would switch the focus back to the downside and attention would increasingly turn to the 1,895 barrier and the 50.0% Fibonacci of 1,877.

In the more medium-term picture, the bullish outlook recently shifted to a neutral one and is likely to stay neutral as long as prices remain within 1,915-1,968.

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).

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