Gold was quiet this week, comparing it to the previous one, where it exploded to the upside, broke the medium-term downside resistance line taken from the peak of the 11th of April and closed above the upper side of the range that it was trading in since the end of July. This week Gold came close to testing the upper side of that range at 1215, but never actually touched it, so it seems that the bulls still remain strong and the recent calmness could be interpreted as a chance for the buyers to try and step in again. Nevertheless, we will remain cautiously bullish, as it is still below key resistance of 1235.
As mentioned above, for a better confirmation of the potential move higher, we would need to see a break of the 1235 level, marked by the high of the 26th of July. This way, we could then target the 1245 obstacle, which was the high of the 17th of July. This is where the commodity could meet the 200 EMA as well. If that obstacle is not able to withhold the pressure from the bulls, then a further acceleration of the rate lead towards the 1266 barrier, marked by the high of the 9th of July.
The RSI and the MACD, both are currently flat, but could be on their path higher. The RSI is above 50, which could be seen as a bullish indication. The MACD is above zero and its trigger lines. Hence, we will remain cautiously bullish until we see another move higher from them.
On the downside, if Gold moves below 1215, this is where we will take a more neutral stance, as the precious metal would get back into the previously mentioned range that is was trading in. For us to get comfortable with the downside scenario, we would need to see Gold traveling all the way down below the aforementioned downside resistance line and also closing below the 1183 zone, which was the lower side of the range. This way we could start examining potential levels like 1172, or even the 1160, marked by the lowest point of August.
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