Gold traded higher on Wednesday after rebounding on Tuesday. Overall, the precious metal is trading above the upside support line drawn from the low of Aug. 9, and thus, we would consider the near-term outlook to be positive.
That said, to get more confident on that front, we would like to see a clear break above the critical resistance zone of 1834, which acted as a temporary ceiling for the price between Jul. 15 and Sept. 3. Such a break could initially pave the way towards the 1870 zone, which provided resistance between Nov. 10 and 18. Another break above that zone could extend the advance towards the high of Jun. 11, at 1903, or the high of Jun. 1, 1917.
Shifting attention to our short-term oscillators, we see that the RSI rebounded from near its 50 line, while the MACD lies slightly above both its zero and trigger lines. Both indicators detect upside speed and corroborate the case for further advances in this precious metal.
On the downside, we would like to see a dip below the upside line and below the 1758 barrier before we start examining the bearish case. This would confirm a forthcoming lower low and may see scope for declines towards the low of Sept. 29, at 1721, the break of which could set the stage for extensions towards the low of Aug. 9.
