GOLD traded higher during this past week, as buyers took control to take the prices higher from the $1260 support level. The precious metal traded as high as $1325, and then started consolidating the gains. There was a wedge formed on the hourly timeframe, which was broken earlier during the day. This can be seen as an important break, as this might have halted the rise in GOLD. If sellers take control, then the yellow metal might trade lower in the coming sessions.
Currently, the prices are around the 100 hourly simple moving average, which is holding the downside for now. If GOLD breaks the 100 hourly SMA, then it might open the doors for further downside acceleration towards the 38.2% fib retracement level of the last up-move from the $1258 low to $1325 high where buyers might appear. If they fail to protect the mentioned fib level, then GOLD could fall towards an important confluence support zone of 50% fib level and the 200 hourly SMA at $1292. This level should hold if the bullish trend needs to sustain in the medium term.
On the other hand, if GOLD rises from the current levels, then it might face hurdle around the broken wedge support area, which might act as a resistance now. If buyers manage to clear the same, then it might re-establish the bullish pressure and take the prices back towards the recent high. A break above $1325 would expose the $1340 resistance area in the short term.
The RSI is heading towards the 50 level, and if breaks together with the price above the $1310 level, then more gains are feasible. Overall, the trend is still bullish as long as 200 hourly SMA holds.
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Posted By IKOFX Technical Team: Online Forex Broker
