Gold prices skyrocketed to a fresh ten-month high earlier today, reaching the 1346.61 level. Currently, it is set to complete the fifth consecutive green day after the rebound on the 23.6% Fibonacci retracement level of the upleg from 1160 to 1346.61, near 1302 and the steep ascending trend line, which has been holding since November 13.
Turning the attention to the technical indicators, the RSI seems to be overbought as it is flattening above the 70 level, suggesting a possible downward correction. However, the MACD oscillator is still strengthening its bullish bias, jumping above the trigger line in the positive zone.
Immediate resistance to further gains would likely come from the 1357 barrier, taken from the highs on April 2018. If there is a successful break above this area, further resistance could be met around the 1365 strong obstacle, which halted bullish movements in the preceding year. Higher up, the July 2016 top of 1375, would be the next target.
If, however, the strong upside momentum was to lose steam and the yellow metal reversed lower, support would initially come from the 1326 level. Slipping below this level could take prices towards the 20-day simple moving average (SMA) currently at 1314 and the diagonal line. Failure to hold above this region would switch the focus back to the downside and would increasingly turn to the 23.6% Fibonacci of 1302 before touching the 40-day SMA around 1300.
In the more medium-term picture, the price is extending gains, endorsing the bullish view following the upward reversal at the 19-month low of 1160 and is in progress to post the second straight positive week.
