Gold attempts recovery to only face limitations again
XM Group | May 07, 2024 11:06AM ET
- h5 Gold stays trapped below 2,325 after Monday’s bounce/h5
- h5 Technical signals reflect persisting caution/h5
Gold had a positive start to the week, bouncing back above its 20-day exponential moving average (EMA), but the bullish attempt was not strong enough to drive the precious metal successfully above the constraining zone of 2,325. This is where the 23.6% Fibonacci retracement of the February-April uptrend and a former restrictive line are placed.
The price seems to have reached a make-or-break point and the technical picture cannot guarantee a meaningful bullish breakout. While the positive trend in the stochastic oscillator is an encouraging sign, the RSI has yet to violate its almost one-month-old downward path despite showing signs of a recovery above its 50 neutral mark.
If the bears retake control below the 20-day EMA, the price might slide towards the 38.2% Fibonacci of 2,260 and perhaps test the 50-day EMA around the same region. If the falling support line from April proves fragile around 2,240 as well, the next stop could be somewhere between 2,220 and the 50% Fibonacci of 2,207. A step lower could aggressively push the price towards the 61.8% Fibonacci of 2,154.
In the case the bulls win the battle around 2,325, they might initially challenge the 2,350 area, where the price peaked on April 26. A continuation higher could then find resistance around the 2,400 psychological mark, while a steeper increase could head for the all-time high of 2,431. Should the market venture into uncharted territory, it could establish a new higher high around the longer-term ascending line at 2,467.
Summing up, gold needs to knock down the wall at 2,325 and preferably overcome the 2,350 territory to bolster buying appetite again. Otherwise, the short-term downleg could stretch towards the 2,260 area.
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.