Gold has been trending lower since early March, generating a profound structure of lower highs and lower lows within a descending channel. Although the precious metal’s latest downleg came to a halt at the six-week low of 1,688, the broader bearish technical picture remains intact.
The short-term oscillators currently suggest that near-term risks remain tilted to the downside. Specifically, the RSI is flatlining beneath its 50-neutral mark, while the MACD histogram is below both zero and its red signal line.
Should selling interest intensify further, the price might encounter immediate support at the six-week low of 1,688. Sliding beneath that level, the bears could aim for the one-year low of 1,681. A violation of the latter would send bullion to form fresh bottoms, where the next obstacle could be found at the April 2020 support of 1,640.
On the flipside, if negative momentum fades and the price drifts higher, the recent support of 1,727 may cap initial advances. Piercing through this region, the precious metal could ascend towards 1,765 or higher to test the August peak of 1,807. Crossing above the latter, gold traders may shift their attention to the 200-day simple moving average (SMA), currently at 1,835.
Overall, despite the latest signs that the market is trying to push for some recovery, gold maintains both its bearish short- and long-term outlooks. For the former to alter, the price needs to decisively cross above the 1,807 ceiling.
