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Technical Analysis – Gold builds base below 1290

Gold builds base below 1290; neutral in the short-term.

Gold prices have been developing within a consolidation area over the last month, with upper boundary the 1290 resistance level and lower boundary the 1266 barrier. Currently, the price hovers beneath the 23.6% Fibonacci retracement level of the down leg from 1346.60 to 1266, around 1285 as well as between the 20- and 40-simple moving averages (SMA).

From the technical point of view, in the 4-hour chart, the stochastic oscillator is turning lower, while the RSI and the MACD are pointing down below 50 and the trigger line respectively, suggesting a possible negative movement.

If the market reverses even lower, immediate support could come from the 1279 support level, taken from the latest lows. A sharper bearish structure could send the yellow metal until the lower boundary of the sideways channel, to the four-month low of 1266.

Otherwise, the price could retest the 23.6% Fibonacci of 1285 before moving near the 1290 resistance. A jump above the latter would end the consolidation phase, opening the way towards the 38.2% Fibonacci of 1297.

Summarising, if the price continues to trade within the consolidation area in the near term, investors could be on hold until a break above 1290 or below 1266.


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This information is not considered as investment advice or investment recommendation but instead a marketing communication. This material has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and that it is not subject to any prohibition on dealing ahead of the dissemination of investment research.

Source: XM

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