Gold prices reached a fresh two-and-a-half-month low of 1,750 on Tuesday, driving the market in a bearish tendency. The 20- and 40-period simple moving averages (SMAs) are heading slightly south as well as the Ichimoku lines in the 4-hour chart.
Looking at the technical indicators, the RSI is moving lower in the negative territory, confirming the recent downside move; however, the stochastic oscillator is trying to recoup some ground, jumping above the oversold region.
If the price continues the selling interest, immediate support could come from the new low at 1,750 before tumbling to the 1,724 barrier. Steeper losses could open the door for the trough on March 31 at 1,724.
In the opposite scenario, a climb higher could find resistance around the short-term SMAs between 1,773-1,775. Rising above this area would help shift the focus to the upside towards the 23.6% Fibonacci retracement level of the down leg from 1,916 to 1,750 at 1,790, which stands inside the Ichimoku cloud. Breaking this level too, the commodity could see a retest of the 1,798 and 1,808 levels before pausing its move at the 38.2% Fibonacci at 1,813.
In the short-term, the bearish phase remains in play especially if gold prices continue to trade below the short-term SMAs and under the key 1,800 level. In the bigger picture, the market has been in a negative correction as well.
