- Gold trades sideways in the past week
- Closes profoundly below the 50-day SMA on Friday
- Momentum indicators turn negative
Gold has been rangebound in the past few trading sessions, following its rejection at the 2,065 mark on February 1. However, on Friday, the price dived beneath the 50-day simple moving average (SMA) before finding its feet at the ascending trendline that connects higher lows since December.
If bearish pressures persist, the price could initially test the recent support of 2,020. Breaking below that zone, bullion may descend towards 2,008 ahead of the January low of 2,001. Even lower, the December bottom of 1,973 could provide downside protection.
Alternatively, should the bulls re-emerge and attempt to push the price higher, the recent resistance of 2,044 could be the first barrier in their way. Failing to halt there, the price may challenge the February high of 2,065. An upside violation of that zone could open the door for the crucial 2,079-2,088 range.
In brief, gold retreated below the 50-day SMA as the short-term oscillators dropped to their negative regions. However, a steep decline has been avoided so far as the upward sloping trendline drawn from December has been holding its ground.
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