Technical analysis: Gold around 1,800 border, bearish risks linger [Video]

Gold is trading near its lower Bollinger band around 1,793 after the four-week decline from the 1,998 peak was curbed by the 1,780-1,788 support base, which was formed by the lows from the second half of December 2021 until the end of January 2022. The longer-term 100- and 200-day simple moving averages (SMAs) are reflecting the stifled bullish trend in the price, while the rolling over of the 50-day SMA, is suggesting that the descent in the commodity has deepened.

The short-term oscillators are skewed to the downside painting a dull picture for positive developments in the yellow metal. The MACD, south of the zero thresholds, is sliding beneath its red trigger line, while the downward-pointing RSI looks set to dip further into oversold territory. Moreover, the stochastic lines, which are underneath the 20 oversold level, are also hinting of further selling in the precious metal.

If the current trajectory persists, sellers could get another crack at the lower Bollinger band at 1,793 and the adjacent 1,780-1,788 immediate support base. Should this key support obstruction fail to keep sellers at bay, the price could then target the 1,750-1,763 support region that extends back to October 2021. Further deterioration in the commodity may then confront downside constraints in the vicinity of 1,715-1,724.

On the flipside, if gold’s footing within the 1,780-1,788 zone develops into positive traction, downside defences could step in at 1,821 ahead of the 200-day SMA around 1,837, which is also the 23.6% Fibonacci retracement of the descent from the 1,998 peak until 1,786. Pushing higher, the bulls may then tackle a resistance band between the 1,858 barrier and the 38.2% Fibo of 1,868. From here, further buoyancy in the price of the commodity could encourage buyers to challenge a region of resistance linking the 100-day SMA at 1,882 with the 50.0% Fibo of 1,892.

Summarizing, gold is sustaining a sturdy bearish bias beneath the SMAs and the 1,858-1,868 resistance zone. A dive below the 1,780-1,788 boundary may add credence to further negative tendencies in the commodity. That said, for gold’s shine to return, the price would need to climb north of the 1,910-1,922 area.