Gold Price Analysis: Sidelined near $1,975 amid signs of buyer exhaustion
|- Gold lacks clear directional bias for the second day.
- Monday's Doji candle is indicative of buyer exhaustion.
- Daily chart indicators continue to report overbought conditions.
Gold is currently trading sidelined near $1,975, having witnessed a two-way business and a flat close on Monday.
Essentially, the yellow metal created a Doji candle on Monday, which comprises long wicks and a small or negligible body. The Doji candle is widely considered to be a sign of indecision in the market place.
In this case, however, the candle has appeared at record highs and following a meteoric rise from $1,450 to $1,988 and indicates buyer exhaustion.
That, alongside overbought readings on key indicators like the 14-day Relative Strength Index (RSI) and slow stochastic, suggests scope for price pullback.
Moreover, the short-term trend would turn bearish if prices end Tuesday below $1,960 – the low of Monday’s Doji candle. That would expose the support of the 200-hour simple moving average, currently at $1,938.
On the higher side, $2,000 is a key hurdle. The bulls may have a tough time establishing a strong foothold above the psychological resistance amid overbought conditions.
Daily chart
Trend: Bull exhaustion
Technical levels
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.