Gold higher

During the past three weeks Gold was trading lower, but few days ago started to move to the upside. Bulls have found enough strength to conquer the strong resistance located at $1280 (Fibo 38.2%, formed by September 22th high at $1343 and October 7th low at $1241). Gold even extended its strong bullish movement and bulls attacked the Fibo 61.8% at $1304 to currently trade at $1305, which is an almost one month high.

Considering the fact that the US dollar is suffering now and is vulnerable by Fed’s decisions on monetary policy and also by the upcoming elections in the United States, market participants turned eyes to the safe heaven precious metal. 

RSI is placed now at the oversold area, pointing north and confirm the bullish trend. Stochastic is showing extreme an overbought market and is displaying lack of momentum.

In case of closing above $1292, the strong upward movement will be confirmed. Next resistance is located at $1307. Looking to downside first support is seen at $1287 and second at $1287.

Gold in oversold area

Since the beginning of October gold broke through 1300 area, but shortly afterwards retreated below the 200-day simple moving average, which is currently located at 1265. As it is clearly seen on the daily chart this line has not been crossed since February. That’s why we should take on consideration the importance of the yearly rally of the yellow metal.  

RSI is showing oversold market and almost is touching the 30 level now. The stochastic is indicating an oversold market as well, but however is displaying lack of momentum.

Support now is located at 1084, 1040 and 1005. Resistance is seen at 1190, 1252 and 1307.

In short, if gold price is not able to push above 1265 (200-day SMA), most likely will follow a test of 1200 area. Before that a consolidation phase is expected, confirmed by the indicators.