Commodities

Gold remains under pressure, unlocking 2½-month low

Gold prices are declining near the new two-and-a-half-month low of 1,853. The price is continuing its move lower after the pullback off the 2,000 psychological mark. If the commodity declines further, immediate support could come from the 200-day simple moving average (SMA) near 1,834, which hovers near the long-term uptrend line. Any steeper downside movements may change the broader outlook to neutral, hitting the 1,780 support and the 1,752-1,762 zone.

Having a look at the technical indicators, they both confirm the recent bearish structure. The RSI is approaching the oversold zone continuing the descending move from the positive region, while the MACD is extending its negative momentum below its trigger and zero lines. Also, the 20- and 40-day SMAs posted a bearish crossover in the previous sessions, and the red Tenkan-sen line is standing below the blue Kijun-sen line of the Ichimoku cloud.

Otherwise, any rebound off the recent low may help the price to gain some ground, reaching the 1,915 resistance and the short-term SMAs, inside the Ichimoku cloud around 1,929 and 1,937. Even higher, the 2,000 round number may halt the bullish actions.

All in all, the precious metal is in a bearish mode in the short-term, but in the bigger view, the picture is still positive.

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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