Gold prices have surged to fresh highs, breaking above a previous sideways channel. The 20- and 50-day simple moving averages have also started to tick up, indicating a bullish trend. Both the MACD and RSI are suggesting more upside pressure in the market, with the MACD showing positive momentum above its trigger and zero lines. The RSI is hovering near the overbought 70 level, holding above an ascending trend line. These technical indicators hint at the potential for further gains in the price of gold.
In the positive scenario, traders are eyeing the 261.8% Fibonacci extension level at 2,515, which is based on the downward wave from 2,079 to 1,810. If gold continues its upward trajectory, the next key resistance level to watch is around the psychological level of 2,600. However, a failure to break above the intraday high could see the precious metal retracing back towards the 2,400-2,431.48 support area.
Should the price of gold experience a pullback, the 20- and 50-day SMAs at 2,342 and 2,326 respectively could act as support levels. These moving averages might help to cushion any selling pressure, preventing a deeper decline. If these levels are breached by bearish momentum, the downside could accelerate towards the 161.8% Fibonacci extension at 2,245. Traders will be closely monitoring these support levels to gauge the strength of the current bullish trend.
Overall, the price of gold is displaying strong bullish momentum, supported by a breakout above key resistance levels and positive technical indicators. While further upside potential remains, traders should remain cautious of potential pullbacks and monitor key support levels for signs of a trend reversal.