Gold strengthens the rebound around 1,800

Written by Melina Deltas

Gold is overperforming the last couple of sessions onthe 4-hour chart, advancing above the short-term downward sloping channel and the 20- and the 50-period simple moving averages (SMAs). The RSI is moving higher above the 50 level, while the stochastic remains in the overbought territory, indicating a possible overstretched market.

Should the metal manage to gather more upside momentum, the next resistance could come around 1,847. A break above this level would shift the bias to a more bullish one and open the way towards the 1,870 barrier and the 200-period SMA at 1,882.

However, if the price is unable to remain above the descending channel, the risk would shift back to the downside, with the next support coming from the 1,820 barrier, which coincides with the 20-period SMA. A drop lower would signal a resumption of the downtrend, meeting 1,804 and 1,795.

In a nutshell, the yellow metal is showing some strength after the bounce off 1,804 and any moves above the 200-period SMA could confirm the bullish correction. 

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).