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Gold begins a new bullish cycle, tests May’s ceiling near 3,450.
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Technical signals favor the bulls, focus shifts to all-time highs.
Gold is once again flirting with its spring record-high area of 3,440–3,500, as the escalating Middle East conflict between Israel and Iran shifted funds towards the safe-haven precious metal.
From a technical perspective, the 20-day simple moving average (SMA) has halted selling pressure for the third consecutive week near 3,300, helping the price rally to as high as 3,450 today. With technical indicators trending positively, traders may anticipate further gains in the coming sessions. However, some caution is warranted, as the stochastic oscillator is approaching its 80 overbought threshold.
The 3,450 zone is currently serving as a key resistance level. A decisive breakout above it could lead to a test of the psychological 3,500 level, which almost capped April’s record rally. Beyond that, attention could turn to the 3,600 area, while a more aggressive rally might target the 161.8% Fibonacci extension of the April–May decline, near 3,735.
On the downside, failure to close above 3,450 may trigger a pullback toward 3,380, or even lower, to the 20-day SMA at 3,340. Further declines could encounter a stronger support region between 3,260 and 3,290; a break below this zone would jeopardize the current upward trend and potentially open the door for a deeper drop toward 3,200.
In summary, gold is attracting fresh buyers near the 3,450 resistance area. A strong close above this level is needed to open the path toward uncharted territory.
Forex trading and trading in other leveraged products involves a significant level of risk and is not suitable for all investors.
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