Gold Price Forecast: Bullish bias, 200-day EMA could be yellow metal's next stop

Gold is looking north, having printed 2.5-month highs this week and could rise further toward the 200-day EMA in the next week or two, technical charts indicate.

At press time, the yellow metal is changing hands at $1,226 - up 0.74 percent on the week.

Stepping back, prices jumped to $1,233 on Monday - the highest level since July 26 - adding credence to the convincing break of the falling trendline witnessed on Oct. 11. Hence, by now, one would have expected prices to trade well above the 100-day EMA of $1,227.

However, despite the bullish setup, the EMA hurdle proved a tough nut to crack. Moreover, the metal printed Intraday highs above the EMA throughout the week but has not been able to scale the EMA on a daily closing basis.

The repeated failure to close above the 100-day EMA could be considered a sign of bullish exhaustion. As a result, a minor pullback to ascending (bullish) 10-day EMA, could be in the offing, but will likely be short-lived as market sentiment is bullish. This is evident from the fact that gold has steadied around the 100-day EMA despite the talk of a more restrictive policy at the Fed.

Further, technicals are biased toward the bulls. For instance, the 5-week and 10-week EMAs have regained bullish (trending north) for the first time since the last week of December 2017.

Meanwhile, 5-day and 10-day EMAs are also rising in favor of the bulls. What's more, the yellow metal has convincingly cleared both diagonal (falling trendline) and horizontal resistance (Aug. 28 high of $1,214) levels.

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• Gold looks set to test the 200-day EMA of $1,251 in the short-term and may rise further to $1,262 (December 2017 low).
• Pullbacks, if any, could find bids around the ascending 10-day EMA. Moreover, a minor correction will likely end up recharging engines for a sustained rally toward the 200-day EMA of $1,251.
• Multiple daily closes below the 10-day EMA would abort the short-term bullish view.

Daily chart

Weekly chart