From the beginning of September, gold keeps on drifting lower, while trading below a short-term tentative downside resistance line taken from the high of September 4th. Although the commodity briefly moved above that line on October 24th, the price fell back below it on Monday. On the other hand, from the beginning of October, the precious metal is forming higher lows. Given the current trendless situation, we will remain neutral, observe the price action and wait for a clear break through one of our key barriers before we examine a further directional move.
If gold makes a move above the 1495 hurdle, which is yesterday’s high, this could attract more buyers into the game and the price may rise to the 1508 area, marked by Monday’s high. If the bulls are still feeling quite comfortable in their position, a break of that area might lead gold to the 1520 barrier, which is near the highest point of October.
Our oscillators, the RSI and the MACD, although they started pointing up, still need to climb a bit higher, in order for us to get slightly more comfortable with the upside. The RSI is just fractionally below 50, but is showing willingness to move higher. A similar situation is with MACD, where the indicator, although below zero still, is now above its trigger line and points north. Both indicators support our neutral stance, at least for now.
If suddenly the price falls below a short-term upside support line drawn from the low of October 11th and the 1484 support barrier, marked by yesterday’s low, this could open the door for a further move down. We will then target the 1474 hurdle, which is the low of October 11th, a break of which could send the commodity to its next possible support mark, at 1459, which is the lowest point of October.
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