Gold Retraces After Hitting 9-Month Peak
Gold has staged a massive rebound since November, erasing a significant part of its 2022 decline. Moreover, the price stormed to a fresh nine-month high last week, but quickly pared its latest gains as its advance seems to be running out of juice.
The momentum indicators are reflecting this loss of positive momentum. Specifically, the MACD histogram is softening below its red signal line in the positive region, while the stochastic oscillator is sloping downwards after posting a bearish cross in the 80-overbought zone.
If selling pressures intensify further, the recent support of 1,916 could curb initial declines. Should that floor collapse, bullion could descend to test 1,896 before the 1,866 barrier comes under examination. Failing to halt there, the 1,825 region might provide additional downside protection.
Gold
On the flipside, should buyers regain control, the price could meet immediate resistance at the recent rejection point of 1,949, which is also a nine-month high. Breaching this wall, the bulls might aim for the crucial 2,000 psychological mark. A break above that zone could set the stage for the 2022 high of 2,070.
Overall, gold appears to be losing upside momentum but is retaining its medium-term bullish setup. Hence, the commodity is likely to enter a consolidation phase in the case that the ascending trendline rejects downside moves.
