Gold Price Forecast: 50-day MA is again capping gains

Gold (XAU) is largely trapped in a $1,190–$1,210 range since the last week of August and is struggling to find acceptance above 50-day moving average (MA) today.

As of writing, XAU is changing hands at $1,204, having faced rejection at the 50-day MA of $1,207.13.

It is worth noting that the yellow metal failed to take out the crucial MA on Sept. 13 and suffered notable losses on the same day. As a result, a break above that level will likely embolden the bulls.

That said, only a break above $1,212 would signal a revival of the rally from the Aug. 16 low of $1,160, the technical chart indicates.

Daily chart

Over on the daily chart, the metal has charted a bull flag-like pattern. A break above $1,212 (top end of the flag) would open up upside towards the trendline trending south from the Apr. 11 high and June 14 high.

At press time, the trendline hurdle is located at $1,230. Acceptance above that level would mean the five-month-long bear market has ended at $1,160.

On the downside, $1,184 (lower end of the flag) is the level to beat for the bears.

However, markets seem to have taken heart from China's measured and watered-down response to the US imports. Hence, the USD – gold's biggest enemy – could remain on the defensive in the near-term, helping the yellow metal climb the flag resistance of $1,212.