Gold remains neutral as negative sentiment takes a breather

Gold’s recent push lower has come to a standstill at the 1459 level while at the same time the ADX indicates an absence of a trend. The loss in steam – in the still neutral-to-bearish picture – is also reflected by the flattening of the 50- and 100-period simple moving averages (SMAs) and the short-term oscillators.

The oscillators reflect a stall in negative momentum. The MACD, is in the negative region and below its red trigger line but has eased slightly. The RSI is climbing in the bearish zone and approaching the 50 level. Noteworthy is the convergence of the 50- and 100-period SMAs, with the 200-period SMA not too far away, which could all suggest that a sideways move could last a while longer.

To the downside, if sellers manage to drive the price below the low of 1459 and nearby support of 1456, the trough of 1450 could be next to test the bears. Moving lower, the 1446 level, which is the 38.2% Fibonacci retracement of the up leg from 1266.20 to 1556.92 could deny further declines towards the August 2013 high of 1434.

If buyers steer above the joined SMAs at 1465, the region of 1473 to 1479 – which also encompasses the 200-period SMA at 1475 – could interrupt the test of the swing high of 1484 and the 23.6% Fibo of 1488. If the buyers persist, the resistance of 1494 from November 6 may apply some pressure ahead of the 1500 handle.

Summarizing, a neutral-to-bearish bias still exists in the short-term and a break below 1446 would only reinforce the negative outlook.