Gold’s technical analysis: Advances yet to conquer dominant bearish structure

Gold is engaging the 1,825 level, in-line with the Ichimoku cloud’s lower surface, which happens to be the 61.8% Fibonacci retracement of the up leg from 1,670 to the all-time high of 2,074. Simultaneously thrusting above the 1,818 border coupled with the 50-period simple moving average (SMA), the bulls are still facing a commanding bearish structure, echoed within the falling slopes of the SMAs.    

The short-term oscillators are reflecting strengthening positive momentum. The MACD is some distance above its red trigger line and is stepping above the zero threshold, while the RSI is improving in the bullish territory. Furthermore, despite easing in the overbought region, the stochastic lines have yet to confirm bearish tendencies below the 80 mark.

If buyers manage to push above the 61.8% Fibo of 1,825 and pilot higher into the cloud, they may encounter the key reinforced resistance section of 1,848-1,856. However, successfully overcoming this heavy border may send the price towards the limiting band from the 50.0% Fibo of 1,873 until the 1,876 high. Surpassing this zone too, where the 200-period SMA also resides, could build confidence in the yellow metal pushing resistance up to 1,885, before aiming for the section of highs from 1,893 to 1,900.

Otherwise, a retreat off the cloud’s floor may meet initial friction from the 1,818 barrier and the 50-period SMA, ahead of the 1,807 nearby low. Dipping further past the 1,800 handle, where the red Tenkan-sen line currently lies, the drop may falter around the 1,784-1,790 support region before targeting the near 5-month low of 1,765, which happens to be the 76.4% Fibo. Resuming the bearish picture, the price may rest at the 1,757 obstacle ahead of the 1,743-1,747 area of lows, before turning its focus towards the July 2020 trough of 1,717.

Summarizing, despite recent attempts to improve in the short-term timeframe, gold remains bearish below the cloud and the 1,848-1,856 resistance boundary.