Gold prices have been in a declining movement since the pullback off the 1,786 resistance level; however, the bullish crossover within the 20- and the 50-day simple moving averages (SMAs) are suggesting more upside structure in the short-term.
From a technical perspective, the short-term bias is viewed as negative, reflected by the downward move in the RSI and the MACD. The former is heading south after the touch in the overbought area, while the MACD is weakening its momentum in the positive region. The increasing distance between the red Tenkan-sen and the blue Kijun-sen lines is another bearish signal.
Yet only a decisive close above the nearby resistance of 1,786, can boost buying pressure towards the 200-day SMA at the 1,800 psychological mark. Stretching further, the bulls may next test the 1,808 resistance ahead of the 1,880 barrier, taken from the peak on June 13.
In the event of a downside reversal beneath the red Tenkan-sen line and the 1,730 support level the Ichimoku cloud and the 20- and 50-day SMAs at 1,703 and 1,684 respectively may ease selling pressure. Failure to bounce on the latter, could bring the 1,675 support into view ahead of the two-and-a-half year low of 1,615.
In the bigger picture, the market printed a triple bottom in the previous months at 1,615 and the climb beyond the 1,730 endorsed a bullish bias in the near-term. A drop below this level could confirm the broader bearish outlook. Overall though, gold prices have a potential to gain additional ground as a jump above the 200-day SMA at 1,800 is expected to trigger the next upside move.
