Gold Price Analysis: Overbought RSI probes XAU/USD bulls at eight week tops above $1,900

Gold prices ease from the multi-day high as US dollar marks corrective pullback.
Risks dwindle amid virus woes, mixed prints of December’s activity numbers in Asia.
Sustained upside break of short-term triangle favor buyers.

Anil Panchal FXStreet

Gold prices trim early Asian gains while receding to $1,921.67, up 1.21% intraday, ahead of Monday’s European session. The yellow metal jumped to its highest since November 09 during early trading hours before stepping back from $1,925.38.

While overbought RSI and the latest pullback in the US dollar index (DXY) could be traced as the triggers for the recent weakness in gold prices, the commodity’s ability to stay beyond a symmetrical triangle from December 16 keeps buyers hopeful.

However, odds of witnessing a pullback to the $1,900 and the resistance line of the stated triangle near $1,893, followed by the triangle support line, at $1,881 now, can’t be ruled out.

In a case where gold sellers conquer a 200-bar SMA level of $1,852.50, short-term horizontal support near $1,820 will be in the spotlight.

Alternatively, an ascending trend line from December 08, at $1,933 now, can offer an intermediate halt during the run-up to November highs near $1,966.

Overall, the risks are changing the course of early-Asian move amid the coronavirus (COVID-19) headlines and ahead of PMI data. However, any strong indicator is yet absent and hence traders may keep their eyes on macro for fresh impulse while cheering the technical breakout.

Gold four-hour chart

Trend: Bullish

Additional important levels

Overview
Today last price	1919.55
Today Daily Change	21.11
Today Daily Change %	1.11%
Today daily open	1898.44

Trends
Daily SMA20	1868.71
Daily SMA50	1866.14
Daily SMA100	1894.61
Daily SMA200	1831.6

Levels
Previous Daily High	1900.99
Previous Daily Low	1897.24
Previous Weekly High	1901.02
Previous Weekly Low	1869.32
Previous Monthly High	1906.87
Previous Monthly Low	1775.52
Daily Fibonacci 38.2%	1898.67
Daily Fibonacci 61.8%	1899.56
Daily Pivot Point S1	1896.79
Daily Pivot Point S2	1895.14
Daily Pivot Point S3	1893.04
Daily Pivot Point R1	1900.54
Daily Pivot Point R2	1902.64
Daily Pivot Point R3	1904.29

Author

Anil Panchal

FXStreet

Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.

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