Technical Analysis: Gold Looks Vulnerable As Ascent Struggles Around 1,870

The converged simple moving averages (SMAs) are sponsoring a trendless market.

The Ichimoku lines are signalling that upside forces are taking a breather, while the short-term oscillators are leaning to the upside. The MACD, in the positive zone, is strengthening above its red trigger line, while the RSI is flirting with the 70 level. The stochastic lines are entangled in the overbought area, and the %K line has yet to suggest any waning in positive impetus.

In the positive scenario, the 1,870 level could continue to limit upside extensions. However, breaching it, the price may aim for the 1,900 handle and the adjoining highs, before challenging the resistance belt of 1,908-1,917, the latter being the near five-month peak. Overstepping this key barrier, the price could then propel for the resistance ceiling of 1,960-1,974, formed by the rally peaks from September and November 2020, as well as January 2021. Moving even higher, the bulls could then turn their focus to the 1,992 boundary.

If sellers manage to block the rally from evolving, preliminary support may commence at the 1,845 low before the bears test the border of 1,828-1,834, shaped by the inside swing highs from mid-July until early September. Slightly lower, the 1,809-1,814 obstacle, reinforced by the flattening Ichimoku lines, may try to counter negative tendencies. That said, should a deeper retracement unfold, sellers may meet the 1,800 barricade ahead of a support area between the 200-day SMA at 1,792 and the 50-day SMA at 1,783. Sinking further, the Ichimoku cloud around 1,776 could act as another upside defence ahead of the 1,759 trough.

Summarizing, gold is sustaining a bullish tone above the Ichimoku lines and the 1,759 low, and a push beyond the 1,870 level may revive upside momentum. Yet, a price pullback beneath the 1,828-1,834 border could start to feed negative pressures.