The gold technical forecast is clearly bullish from a medium-term perspective. Price action in the week ahead could determine if that forecast is at risk and it will be important to watch a couple of key technical barriers.
I would argue that the near-term uptrend is being maintained by rising support from December. If there are declines over the next 5 days and the latter holds, that will likely keep the short-term technical bias to the upside.
Keep a close eye on the psychological barrier between 1587 to 1593 in the event of a turn lower as it may also work to keep downside progress at bay. Immediate support appears to be the 61.80% Fibonacci extension level at 1638. Above sits the 78.6% area at 1666 along gold’s way to the 2013 high at 1697. The lack of RSI divergence shows that there is momentum behind the metal’s push for the time being.
GOLD NEAR-TERM FORECAST
Zooming in further on the 4-hour chart can give a better picture of what may be in store in the week ahead specifically. Here, I have drawn rising support from the middle of February which is maintaining the immediate uptrend – pink line below. Like with the daily chart, there is no presence of RSI divergence which shows that momentum is in gold’s favor.
If gold prices close under 1638 (mentioned above), that may shift the immediate outlook bearish towards the pink line. Confirming a close under the March 2013 high would thus open the door to revisiting rising support from December.
