Gold prices are posting some gains, touching the 200-day simple moving average (SMA), which is acting as strong resistance in the short-term. In the broader picture, the price has been holding in a descending channel since the pullback from the record high of 2,074.89 on August 7.
In terms of trend indicators, the Ichimoku lines are heading south alongside the 20- and 40-day SMAs. However, the %K line of the stochastic oscillator is posting a bullish crossover within the %D line above the oversold zone and the RSI is pointing marginally up in the negative zone, both suggesting some upside retracement.
A successful climb above SMAs and the Ichimoku cloud could take the commodity towards the 1,965 barrier, breaking the downward sloping channel to the upside. Even higher, immediate resistance could come from 1,993 and 2,017 ahead the of the all-time high of 2,074.89.
Alternatively, a fall beneath 1,817 could touch the 1,764 support before the market moves lower to 1,704 increasing the bearish sentiment. Slightly below these levels, the 1,668 hurdle could add optimism to the bears for more losses.
Overall, the yellow metal has been in a downtrend over the last six months and only a decisive close above the record high of 2,074.89 could switch this outlook to bullish again.
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