- Gold unlocks fresh all-time high
- Bullish wave could stabilize, but perhaps temporarily
Gold has been in an uninterrupted record rally over the past week, ticking to a new high of 2,304 before losing some steam early on Thursday.
While investors continue to debate the longevity of the bullish wave as the rate cut scenario remains a hot topic in the US, it is possible that some profit taking could occur. The pause near the short-term resistance line and the overbought signals coming from the RSI and stochastic oscillator endorse that case.
If the current weakness lingers, the price could retrace to the support trendline at 2,280. The 20-period exponential moving average (EMA) at 2,270 and the support-turned-into-resistance trendline at 2,255 will be closely monitored before the spotlight turns to the 50-period SMA and the 2,225 constraining zone. An extension lower would neutralize the short-term positive outlook.
Should the bull run resume above 2,300, the 261.8% Fibonacci extension of the 2,222-2,157 pullback at 2,325 could be the next obstacle. The 423.6% Fibonacci extension of the 2,195-2,145 downfall at 2,350 might attempt to stop the rally ahead of the 2,400 psychological level.
To sum up, the technical picture indicates an overstretched rally, but the market’s upward structure remains strong, suggesting that any potential pullback would be a normal part of the positive trend.
