Gold rallies to 7-month peak, stretching the bullish structure

Gold skyrocketed to a new seven-month high of 1,865, exiting from the medium-term ascending channel, suggesting that the recent uptrend is likely to stay in place for now. The RSI is standing in the overbought territory, while the MACD is extending its bullish momentum above its trigger and zero lines.

In case the pair continues its direction to the upside, the bulls will probably challenge the previous top at 1,878. A break higher, could last until the 2,000 psychological mark, registered in April 2022.

Alternatively, any declines may drive the price towards the 1,850-1,857 support area before the 23.6% Fibonacci retracement level of the up leg from 1,740 to 1,865 at 1,835. Beneath the latter, the 1,833 barrier and the 20-period simple moving average (SMA) at 1,835 come into view. Even lower, the 38.2% Fibonacci of 1,817, which overlaps with the 50-day SMA may attract bears attention.

Turning to the medium-term picture, the pair switched to strongly bullish after the rally towards 1,865 despite the latest fall in the 4-hour chart.

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).