Gold has created a new two-week high of 1262.13 over today’s European session and is trying to have a session close above the 1261 barrier in the 4-hour chart. The technical indicators are sending bullish signals, supporting the upside movement in price action and suggesting that the softness may come to an end.
The Relative Strength Index (RSI) is moving towards the threshold of 70, while the %K line of the stochastic oscillator is approaching the overbought zone with the %D line.
If the market manages to pick up speed and surpasses 1261, the 38.2% Fibonacci retracement level of the upleg from 1122 to 1366, around 1272 could offer nearby resistance. A significant close above the latter could push the commodity even higher until the 200-simple moving average (SMA) near 1280 at the time of writing.
Should prices decline, immediate support could be found around the 40-SMA of 1252. Then a leg below that level could meet the 50.0% Fibonacci region of 1244, increasing downside pressures in the near term.
To conclude, the precious metal has been holding within a downward sloping channel since April 11, indicating that the price remains in a bearish mode in the long term.
