- Gold trades back and forth in the past few sessions
- Price fails to claim 50-day SMA and restrictive trendline
- Momentum indicators are neutral-to-bullish
Gold has been under pressure lately following its break below the 50-day simple moving average (SMA). Although the price managed to find its feet at the lower end of the Ichimoku cloud, it has failed to jump back above the downward sloping trendline drawn from the all-time high of 2,450.
Should the latest weakness persist, the price could test the recent support of 2,294. Further declines could then stall at the 2,286-2,777 range, defined by the May and June lows. Even lower, bullion might face the March resistance of 2,223, which could serve as support in the future.
On the flipside, if the price rotates back above the 50-day SMA, the latest rejection region of 2,368 could prove to be the first barricade for the bulls to overcome. Higher, the June peak of 2,388 may prevent further upside attempts. Failing to halt there, the price may revisit the April high of 2,430.
In brief, gold dipped below its 50-day SMA, extending its structure of lower highs. Therefore, a solid move above the restrictive trendline drawn by connecting these lower highs is needed for the price to escape its short-term bearish pattern.
