Gold RSI Suggests More Room for Additional Upside – While the actual bullish break materialized after a classic symmetrical triangle pattern was confirmed on the daily chart last Thursday. The bulls rallied hard to clock a fresh seven-year high at 1751.80 before retracing slightly into the weekly closing on Friday.
In a month’s time, the gold price is likely to test the pattern target at $1801. Ahead of that level, the key resistances are located at 1754.39 (Nov 2012 high), 1760 (round number) and 1795.25 (Oct 2012 high).
Advocating the case for additional gains, the daily Relative Strength Index (RSI) is pointing upwards, although remains below the overbought territory, near the 65.15 region. Meanwhile, the spot trades above all majors DMAs.
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Alternatively, any pullback will target the earlier resistance-turned-descending trendline support aligned at 1719.61, below which the 21-DMA will be tested on its south run towards the $1,700 level. Selling pressure will accelerate below the latter, opening floors for a test of the ascending trendline (pattern) support at 1,685.56.
