Gold prices have consolidating within a sideways channel since August 17, with upper boundary the 1212.50 resistance level and lower boundary the 1180.60 support barrier. It is worth mentioning that the price jumped above the 20- and 40-simple moving averages (SMA) in the 4-hour chart with strong movement. The RSI indicator is moving north above the 50 level, while the MACD oscillator entered into the overbought zone.
If price action jumps higher, there is scope to test the 1203 resistance level and clearing this key level could see additional gains towards the upper boundary of 1212.50. If the price successfully penetrates the trading range, it would challenge the 1217 – 1220 resistance zone, identified by the peaks in early August.
Alternatively, if the precious metal dips below the 1193.80 level again, then the focus would shift towards the 20-SMA near 1188.75. If this level is breached too, it would increase downside pressure and may bring about a continuation of the medium-term bearish tendency. From there, the metal would be on the path towards the 1180.60 low.
Despite the neutral short-term bias, in the bigger picture, the price has been developing in bearish mode since the pullback on the 1365 resistance barrier.
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