Gold loses steam near 1,959 resistance; bias neutral-to-bearish

Gold could not find enough buyers to cross the key resistance of 1,959 last week, with the price tumbling to 1,933 early on Monday.

The short-term bias is looking neutral-to-bearish as the RSI keeps fluctuating around its 50 neutral mark. The Stochastics have lost steam and are set for a downside reversal, while the MACD remains negatively charged between its signal and zero lines.

If sellers manage to breach the 1,920 floor, where the 50% Fibonacci retracement of the 1,780 – 2,070 upleg happens to be, the spotlight will immediately turn to the 50-day simple moving average (SMA) at 1,890. The 61.8% Fibonacci level of 1,870 is within breathing distance and may delay any declines towards the 1,850 handle.Alternatively, for bullion to touch the crucial 2,000 number, upside pressures will need to successfully speed above the 1,959 bar. If the aforementioned levels prove easy to overcome, the bulls may attempt to print fresh record highs above the 2020 top of 2,079. In this case, the 161.8% Fibonacci extension of the latest downfall at 2,178 will be closely watched.Summarizing, the precious yellow metal has started the week on the back foot, but the nearby support of 1,920 is still intact. A clear close below that base could strengthen selling tendencies.  

About the author

Christina Parthenidou

Christina joined the XM investment research department in May 2017. She holds a master degree in Economics and Business from the Erasmus University Rotterdam with a specialization in International economics. Previously, she earned a bachelor of science in Economics from the University of Cyprus. Apart from foreign exchange markets, her research interests include the impact of International trade on labour markets and product development.

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