- Gold slows pace after rebound off neckline
- RSI and stochastics look overstretched
Gold prices jumped higher, meeting the restrictive region of 2,370–2,390, which is also acting as the right shoulder pattern in the short-term picture.
However, the technical oscillators and the current market price action suggest a downside reversal. The RSI is pointing downward above the neutral threshold of 50, whereas the stochastic is flattening in overbought territory.
Should prices reverse lower, immediate support could come from the 50- and 20-day simple moving averages (SMAs) at 2,346 and 2,334 respectively. A drop below this area would take the commodity towards the neckline around 2,300 before testing the lower boundary of the trading range at 2,277. A drop beneath these lines could significantly endorse the bearish outlook, hitting the 2,222 barrier.
On the other hand, a successful close above the previous high could find major resistance at the 2,431 mark, ahead of the record peak of 2,480. Even higher, the next round numbers, such as 2,500 and 2,600, could attract traders’ attention.
All in all, the precious metal has been developing in a sideways pattern in the near term, and only decisive moves above 2,450 or below 2,277 may change this view.
