Gold has been edging sharply lower during today’s European session after the pullback on the 1319 resistance level. It is worth mentioning that the price has been developing within a trading range since January 2 with the 1365 resistance level being the upper boundary and the 1303 support level the lower boundary, while it lacks a clear trend.
Technically, in the 4-hour chart, the RSI indicator is sloping to the downside and is approaching the negative territory, while the stochastic oscillator posted a bearish cross within the %K line and the %D line, signaling further downside pressure in the positive area.
In the wake of negative pressures and a drop below the 20-simple moving average (SMA) in the near-term, the market could meet the 1303 strong support barrier. A successful close below this level could see a break of the consolidation zone and drive the precious metal lower towards 1289 taken from the high on December 2017.
However, if prices are able to break above the 20-SMA near 1313 in the next few sessions, the risk would shift to the upside, specifically towards the 1319 resistance level. A jump above this level could push the precious metal higher until the 1325.75 resistance barrier.
