Gold is hovering around the March 20, 2023 high of 2,010, having retreated from the recent one-year higher high. Keeping gold price above the 2,000 threshold appears to be their primary target for the bulls, following the rather explosive move from the early March 2023 dip at the 1,800 area.
On the other hand, gold bears are trying to stage a comeback. They appeared massively unprepared at the recent rally as multiple resistance points were broken until the April 13, 2023 high of 2,049. Favouring the bears, the momentum indicators seem to suggest that the bullish move has run its course. In particular, the Average Directional Movement Index (ADX) is clearly pointing to a trendless market at this juncture.
Interestingly, the stochastic oscillator is sending a “double” message. This indicator has been hovering at its overbought (OB) territory for the past month, clearly showing signs of exhaustion. In addition, the recent higher high in gold has not been confirmed by a similar print in the stochastic, setting the scene for a bearish divergence.
Should the bears muster the courage and take advantage of the bearish signals, they would aim for a break of the 2,000 level. Lower, the January 6, 2021 high of 1,959 seems to be a strong support area, just ahead of the September 6, 2021 high of 1,921.
On the other hand, the bulls would love another retest of the recent high of 2,049. If successful, the August 7, 2020 high of 2,075 would then be the next target.
To sum up, the recent rally appears to have run out of gas. Gold bears are trying to push the price below the 2,000 mark on the back of some initial bearish signs from the momentum indicators.