Gold retraces lower after hitting crucial ascending trendline [Video]
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Gold manages to halt the pullback from its recent record high
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But rebound meets strong resistance at important ascending trendline
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Momentum indicators suggest that positive momentum is fading
Gold had been in a steep uptrend since November 10, recording a fresh all-time high of 2,144 before experiencing a solid correction. Although the bulls attempted to erase this pullback, the upward sloping trendline drawn from its October lows, which previously acted as support, rejected further advances.
Given that both the RSI and MACD remain in their positive zones, the price could edge higher to challenge the April resistance of 2,032. A violation of that zone could pave the way for the recent rejection region of 2,048, which also held strong in April and May. Further upside attempts could cease at the April peak of 2,079 ahead of the record high of 2,144.
Alternatively, if the price reverses lower, a couple of previous resistance regions such as 2,009 and 1,987 could act as the initial lines of defence. Sliding beneath that floor, bullion could test the December bottom of 1,973. Even lower, the October support of 1,954 may provide downside protection.
In brief, gold seems to be trading back and forth after posting a fresh all-time high. However, the positive technical picture remains intact as the price holds comfortably above the 2,000 psychological mark.
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