- Gold extends its fall from the 5-month peak of 2,009
- Hits the crucial 200-day SMA, which holds strong for now
- Momentum indicators slowly tilt to the bearish side
Gold had been in a steep uptrend since October 10 mainly on the back of geopolitical tensions, reclaiming crucial technical regions and posting a fresh five-month peak of 2,009. However, bullion has been experiencing a solid downside correction since then, with short-term oscillators pointing at more pain ahead.
Should gold resume its freefall, the bears could initially attack the 1,932 region, which has acted both as support and resistance throughout 2023 and coincides with the 200-day simple moving average (SMA). Failing to halt there, the price may descend towards the September support of 1,901. Even lower, the August bottom of 1,885 might provide downside protection.
On the flipside, if bullion bounces off the 200-day SMA and storms back higher, immediate resistance could be found at the October support of 1,954, which also acted as resistance in early September. Piercing through that region, the price could face the July resistance of 1,987. Further advances could then cease at the crucial 2,000 psychological mark.
In brief gold seems to be under relentless downside pressure, but the 200-day SMA has temporarily paused the steep retreat. Hence, it is clear that a break below the crucial obstacle could easily trigger an acceleration of the decline.
