Gold has been in an uptrend since late June when the price found its feet slightly below the 1,900 psychological mark. Even though bullion recently stormed to a fresh two-month high of 1,984, it has been trading sideways for the last few four-hour sessions, appearing unable to extend its rally.
The momentum indicators are endorsing a bullish near-term bias. Specifically, the RSI is holding above its 70-overbought zone, while the MACD is strengthening above both zero and its red signal line. Considering that the price is trading very close to its upper Bollinger Band, it could also be argued that it has reached overbought conditions.
Should bulls try to push the price higher, the recent two-month high of 1,984 could act as the first resistance territory. Breaking above that zone, the price could challenge 2,004, which is the 123.6% Fibonacci extension of the 1,983-1,892 downtrend observed in June. If gold storms higher to post fresh multi-month peaks, the 138.2% Fibo of 2,017 may curb any upside attempts.
On the flipside, bearish actions could send the price to initially test the 78.6% Fibo of 1,963. Even lower, the attention could shift to the 61.8% Fibo of 1,948 before the 50.0% Fibo of 1,937 gets tested. Further declines might then cease at the 38.2% Fibo of 1,927.
In brief, gold has been steadily gaining ground since early July, while the recent completion of a golden cross between the 50-period simple moving average (SMA) and the 200-period SMA could act as an additional tailwind. However, a pullback should not be ruled out as the price has approached overbought conditions.
