Gold has been losing ground since mid-June, dropping below the 1,900 handle for the first in more than three months. However, the commodity managed to regain traction and jump above its 50-period simple moving average (SMA), while it is set to challenge the upper boundary of the Ichimoku cloud.
The momentum indicators currently suggest that bullish forces are in control. Specifically, the RSI is ascending above its 50-neutral mark, while the MACD is strengthening above its red signal line in the positive territory.
Should the price extend its advance, the 1,933 resistance zone could prove to be the first hurdle for buyers to clear. Breaking above that zone, bullion could challenge 1,939, which served as both resistance and support throughout June. Even higher, further advances could cease at the 1,954 barrier before the spotlight turns to 1,968.
On the flipside, if the recovery falters and the price reverses lower, the recent support of 1,920 might act as the first line of defence. Sliding beneath that floor, gold could dip below its 50-period SMA to test the 1,910 support region. A violation of the latter could pave the way for the three-month low of 1,893.
In brief, gold seems to be in a recovery phase, with its latest advance being on hold for now. Therefore, a break above the Ichimoku cloud could provide early indications that the recent rebound is likely to persist.
, while it is set to challenge the upper boundary of the Ichimoku cloud. ){kind=link}