Gold experienced a mild pullback after peaking at the all-time high of 2,079 in early May, falling beneath its 2,000 psychological mark and the 50-day simple moving average (SMA). Although bullion managed to halt its retreat at the 2½-month low of 1,932, it has been trading sideways for the past three weeks.
The momentum indicators currently suggest that bearish forces are subsiding. Specifically, the MACD jumped above its red signal line but remains in negative territory, while the stochastic oscillator is ticking upwards after posting a bullish cross.
Should buying pressures intensify, the bulls could attack 1,985, which is the upper end of the recent rangebound pattern. A violation of that zone could set the stage for the 2,000 psychological mark before 2,048 comes under examination. Failing to halt there, the price could ascend to test its record high of 2,079.
On the flipside, if the short-term weakness persists, the price could initially challenge the 2½-month low of 1,932. Should that floor collapse, the spotlight could turn to 1,885 before the 2023 bottom of 1,804 gets tested. A break below the latter could trigger a retreat towards the 1,774 hurdle.
Overall, gold has been directionless in the past three weeks, but the short-term oscillators are slowly tilting towards the bullish side. Therefore, a break above the 50-day SMA is needed to put an end to the recent downside correction.
. Although bullion managed to halt its retreat at the 2½-month low of 1,932, it has been trading sideways for the past three weeks.){kind=link}