Saturday, June 3, 2023

Gold Drags Below 200-SMA; 1,800 In Focus


Gold started the week on a slightly negative note, aiming to extend Friday’s pullback from the 200-day simple moving average (SMA) towards the 1,800 level.

Another downside correction is likely given the weakness in the Stochastics and the bearish reversal in the RSI, which is ready to step back below its 50 neutral level.

On the other hand, the steady recovery in the MACD is creating some speculation about whether any downfall could survive below the 1,800 mark, where the 50% Fibonacci of the 1,676 – 1,916 up leg and the 20-day SMA are also positioned.

Failure to hold above 1,800 could generate a more aggressive decline towards the 61.8% Fibonacci of 1,753, while within breathing distance, the long-term ascending trendline from the 2019 lows could build a stronger floor. If selling pressures persist, the next stop could be the 78.6% Fibonacci of 1,728.

In the positive scenario where the precious metal breaches the wall between its 200- and 50-day SMAs, the next obstacle could emerge around the 23.6% Fibonacci of 1,860. Moving higher, the price may face some consolidation within the 1,887 – 1,900 zone before pushing for fresh highs above 1,916.

Meanwhile in the long-term picture, the downtrend from the 2,079 peak remains valid as long as the price continues to fluctuate below 1,959.

Summarizing, gold is facing a neutral-to-bearish bias in the short-term picture, where a decisive close below 1,800 is expected to give fresh impetus to the latest pullback.


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