Gold bulls got extra energy on Friday, driving the price towards an almost six-year high of 1,411. Downside corrections are likely in the very short term as the stochastics are set for a bearish cross above 80 overbought mark. The MACD however, has yet to show any sign of weakness, an indication that any slowdown in the market may be short-lived.
Slightly higher, the 50% Fibonacci ratio of 1,421 of the three-year old downleg from 1,796 to 1,046 could prove a trigger point for another bullish round if breached successfully. Such a move would shift all the attention towards a stronger barrier around 1,520.
The 1,400 level is currently working as an immediate support to downside movements. Falling aggressively below that number, the next stop could be within the 1,365-1,356 former resistance zone, while even lower the market may be exposed to the 38.2% Fibonacci of 1,332 and the 1,325 mark.
In the bigger picture, the recent gains turned the market strongly bullish as well. The positive slope in the 50-day simple moving average (SMA) suggests that the bright outlook may not fade soon.
In brief, gold is trading in the green both in the short- and the long-term, eyeing a key resistance around 1,421 in coming sessions.
