Gold staged another exciting bullish run early on Tuesday to finally re-enter the 2,000 level after almost two years since its pandemic peak.
Particularly, the price is currently testing the resistance zone of 2,020 from August 2020, making any downside corrections or some consolidation likely at this point as the RSI and the Stochastics flash overbought conditions. That said, neither of those indicators is showing signs of abating, while the MACD continues to gain momentum at two-year highs, reflecting persisting buying forces.
Meanwhile in trend indicators, the shorter-term simple moving averages (SMAs) keep pointing upwards with a steeper positive slope than the longer-term SMAs, endorsing the improving broad outlook in the market.
On the upside, the biggest challenge will be the 2,079 record high and potentially the 2,115 region, where the tentative ascending line that joins the 2011 and 2020 peaks is passing through. A sustainable extension above that boundary may hit a new wall around the 2,300 level taken from the 161.8% Fibonacci retracement of the 2,079 – 1,676 downleg.
Should selling pressures resurface, initial support could commence around the 1,975 zone, while a sharper decline below 1,950 could squeeze the price towards the 1,915 – 1,900 area and the 20-day SMA. Lower, the bears could take a rest somewhere near 1,870.
Summarizing, gold has opened the gates towards the 2,079 record high after restoring its bullish outlook in the long-term picture. While some stabilization could be normal after the impressive three-day rally, the technical picture suggests buyers may not easily lose their interest in the market.
