Gold has declined considerably since hitting the one-month high of 1324.40 on Monday’s trading session, returning back below the red Tenkan-sen line. The technical indicators are suggesting a potential downside risk as both are weakening. The RSI is falling towards the 50 level, while the MACD is ready for a bearish crossover with its trigger line.
Despite the technical indicators view, the current structure remains bullish in the
Should the price continue the bearish movement, immediate support could come from the 23.6% Fibonacci retracement level of the up leg from 1280.63 to 1324.40, near 1314. Slightly below, the uptrend line and the 40-SMA could act as major support levels around 1310. A drop beneath these lines could send the price until the 38.2% Fibonacci of 1307.72 and the 1306.75 support. More downside movement could touch the 50.0% Fibonacci of 1303, which stands inside the Ichimoku cloud.
On the other side, resistance would likely come from the one-month high of 1324.40 ahead of the 1330 – 1333 resistance levels. Breaking these obstacles too, the investors could look next at the ten-month high of 1346.60.
To sum up, gold could follow a positive path in the short term, while in the medium term, the bullish outlook could come back into play if the precious metal overcome the ten-month high.
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