Gold Gains Momentum, Rising Above Descending Channel

Gold prices are creating an upside rollercoaster, exiting from the preceding days’ long-term descending channel. The price is looking strongly positive, surpassing the 200-day simple moving average (SMA) and the 50.0% Fibonacci retracement level of the down leg from 2,074.89 to 1,676 at 1,875.

The stochastic oscillator is turning up again in the overbought region, while the RSI is still gaining ground above the 70 levels. Both are suggesting more gains despite the overstretched market. More upside pressure could drive the price towards the 61.8% Fibonacci of 1,919 ahead of the 1,965 resistance and the 1,993 barriers. Marginally above these levels, the 2,017 level could come next.

On the other side, a bearish movement could take the market towards the 200-day SMA at 1,845 before testing the 38.2% Fibonacci at 1,826, which overlaps with the 20-day SMA. Below that, the 40-day SMA at 1,786 could come into the spotlight before meeting the 23.6% Fibonacci at 1,768. Even lower, the 1,676 support may act as a turning point again.

Overall, the yellow metal has been in a bullish tendency in the short-term and is trying to shift the long-term outlook to positive as well.

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