Gold stretched Friday’s upleg to an intra-day high of 1,670 before turning negative again below 1,660 on Monday.
In terms of market trend, the precious metal seems to be forming a bullish double bottom pattern around 1,614, though a durable extension above the 1,730 neckline is required to confirm it.
Encouragingly, the previous three candlesticks resembled a bullish doji setting, increasing hopes for an upside reversal too.
In the meantime, though, the technical oscillators suggest that the market may keep facing choppy trading as the RSI remains below its 50 neutral mark and the MACD hovers beneath its red signal line despite an attempt for an upside reversal.
The flattening 20-day simple moving average (SMA) at 1,670 has been curbing upside corrections for almost a week. Therefore, a close above it may help the price reach the surface of the bearish channel and the 50-day SMA around 1,700. If buyers push the price higher, the door will open for October’s high of 1,730, while higher, some consolidation could emerge around 1,765 before the focus shifts to the 200-day SMA at 1,810.
In the bearish scenario, where the 1,614 floor collapses, the price could chart a new lower low within the 1,585-1,565-zone taken from January-April 2020. The 1,500 psychological mark could come into view next.
In brief, although gold’s bearish trend is showing some signs of exhaustion, there are still a couple of key obstacles overhead which the price needs to tackle in order to upgrade its negative outlook.