Gold is at a very tricky spot right now. On one hand, from around the beginning of September, the precious metal continues to move lower, trading below a short-term tentative downside resistance line taken from the high of September 4th. On the other hand, this current slide could still be seen as part of a larger correction lower. The reason is that the commodity remains in an overall uptrend, after bottoming in December 2015. That said, from the shorter-term perspective, as long as the price stays below the aforementioned downside line, we will remain somewhat bearish.
If the price climbs a bit higher, it may end up testing the 1480 barrier, which previously acted as a strong area of support on October 16th, 22nd and 30th. If gold struggles to overcome that area, the bears might re-enter the field and drive the yellow metal towards the 1459 hurdle, or even the 1446 zone, which is the current low of this week. Slightly below that lies another potential support level, at 1430, which marks the low of August 2nd and coincides with the 200-day EMA. That area might stall the price temporarily.
Looking at our oscillators on our daily chart, the RSI and the MACD, both seem to support the idea of a small move higher before another round of selling. The RSI is currently pointing slightly higher, but remains below 50. The MACD, despite running flat right now, is still below its trigger and zero lines.
For us to start considering the upside, ideally, we would like to see a break of the aforementioned upside line and a daily close above the 1518 barrier, which is marked near the highs of October 3rd, 9th and 25th. This way, more buyers could see it as a good opportunity to join in and push gold higher. This is when we will target the 1536 obstacle, a break of which may set the stage for a test of the 1557 level, marked by the highest point of September.
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