Gold stayed buoyant above the 1,900 psychological mark despite experiencing a flash drop to a seven-week low of 1,896 on Tuesday.
The precious metal is currently trying to regain some ground as the RSI and the Stochastic oscillators are deviating above their oversold levels. A major resistance area, however, is still overhead.
The price could still get another rejection from the downward-sloping trendline at 1,907 and the 20-period simple moving average (SMA). Notably, the 61.8% Fibonacci retracement level of the March-May uptrend is marginally higher at 1,911. Hence, if the bulls successfully pierce through that wall, there is higher potential to reach the 50-period SMA at 1,920. A stronger rally could retest the key 1,930 zone, which was the neckline of the inverse head and shoulders pattern in June-July. A sustainable move higher could continue until the 200-day SMA and the 50% Fibonacci mark of 1,943.
On the downside, a close below the 1,896-1,900 support area could push the price towards the 1,886 barrier last seen during the February-March period. Failure to pivot there might trigger a more aggressive decline into the 1,870-1,860 constraining region.
In brief, gold remains exposed to downside pressure, as the bulls have yet to overcome an important resistance trendline. A step below 1,896 could activate new selling orders.
Gold stayed buoyant above the 1,900 psychological mark despite experiencing a flash drop to a seven-week low of 1,896 on Tuesday.
The precious metal is currently trying to regain some ground as the RSI and the Stochastic oscillators are deviating above their oversold levels. A major resistance area, however, is still overhead.
The price could still get another rejection from the downward-sloping trendline at 1,907 and the 20-period simple moving average (SMA). Notably, the 61.8% Fibonacci retracement level of the March-May uptrend is marginally higher at 1,911. Hence, if the bulls successfully pierce through that wall, there is higher potential to reach the 50-period SMA at 1,920. A stronger rally could retest the key 1,930 zone, which was the neckline of the inverse head and shoulders pattern in June-July. A sustainable move higher could continue until the 200-day SMA and the 50% Fibonacci mark of 1,943.
On the downside, a close below the 1,896-1,900 support area could push the price towards the 1,886 barrier last seen during the February-March period. Failure to pivot there might trigger a more aggressive decline into the 1,870-1,860 constraining region.
In brief, gold remains exposed to downside pressure, as the bulls have yet to overcome an important resistance trendline. A step below 1,896 could activate new selling orders.
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