Gold came under pressure following the peak at a 7-year high of 1,611 but the 1,535 level rejected the downside move, sending the price slightly up.
The upside reversal in the RSI and the rebound in the Stochastics suggest that there is still some room for improvement in the short-term, though with the MACD having recently reached a peak and eased its momentum below the red signal line, the price could probably gain ground only within this month’s range.
Heading higher, the price could attempt to close above the 1,577 level which the bulls failed to successfully overcome earlier this month. If the obstacle proves easy to get through, the spotlight will turn to the 1,600-1,620 area, where any breakout higher would re-activate the long uptrend from August 2018, turning the bigger picture even more positive. Should the bulls persist, the next stop could be around the 1,685 former barrier.
On the flip side, the bears need to cross below 1,515 to discourage buying interest if the 1,535 fails to hold any correction. This is also where the 23.6% Fibonacci of the 1,196-1,611 upleg lies, adding extra importance to the region. Slipping lower, the price could retest the upper line of the broken descending channel and the 38.2% Fibonacci of 1,453 before challenging the 200-day simple moving average (SMA), which may trigger a sharper sell-off if significantly violated.
In brief, the precious yellow metal is expected to attract additional gains in the short-term, though remaining within a range.