Gold prices have been developing within a narrow range over the last month with upper boundary the 1212.50 resistance level and lower boundary the 1187.55 support barrier. Also, the price still trades below the 20- and 40-period simple moving averages (SMAs) on the 4-hour chart. Notice that the RSI is mostly moving sideways below the 50 level and the MACD remains below both its trigger and zero lines.
If price action jumps above the SMAs, there is scope to test the upper boundary of 1212.50, taken from the high on September 13. Clearing this key level could see additional gains towards the 1217 – 1220 resistance zone, identified by the peaks on August 28.
Alternatively, if the precious metal dips below the 1187.55 key level, then the focus would shift towards the 1183 support hurdle, identified by the low on August 24. If this level is breached too, it would increase downside pressure and may bring about a continuation of the bearish tendency. From there, the metal would be on the path towards the 1172 low.
Despite the neutral short-term bias, in the bigger picture the price has been developing in bearish mode since the pullback on the 1365 resistance barrier.
