Gold Hits Resistance Near 1243 and Pulls Back
|Gold traded higher yesterday but hit resistance near the 1243 zone and then, it retreated to find support at around 1233. Although the precious metal has been printing higher peaks and higher troughs recently, it remains within the sideways range that has been containing most of the price action since the 11th of October, between 1212 and 1243. Thus, we will adopt a neutral stance for now.
If the bulls are strong enough to take charge from current levels, then we may see them targeting once again the 1243 territory. However, we would like to see a decisive move above 1245, near the highs of the 16th and 17th of July, before we get confident on further bullish extensions. Such a break could confirm the upside exit of the aforementioned range and may initially aim for the psychological zone of 1250. Another break above 1250 could set the stage for peak of the 11th of July, at around 1257.
Shifting attention to our short-term momentum studies, we see that the RSI rebounded from its respective upside support line, slightly above its 50 level, while the MACD, although positive, stands fractionally below its trigger line. The RSI supports the notion for another positive leg in the yellow metal, but the fact that the MACD remains below its trigger line enhances our choice to wait for a break above 1245.
On the downside, a clear dip below 1229 could suggest that traders prefer to keep the price within the aforementioned range, instead of pushing it higher. We could then see the bears aiming for the 1223 zone, the break of which could allow the price to drop near the 1216 barrier, which is marginally below the low of the 30th of November.
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