Technical Analysis: Gold buyers should stay cautiously optimistic
Gold rises to the fresh high in two weeks following a stellar rise on Wednesday. In doing so, the yellow metal crosses 50% Fibonacci retracement of its November-January upside amid upbeat RSI and MACD conditions. Also favoring the bullion could be the market optimism backed by Joe Biden’s arrival in the White House as the 46th President of the US. Even so, 100-SMA around $1,878 guards the quote’s immediate upside amid nearly overbought RSI conditions. Even if the bullion rises past-$1,878, the $1,900 round-figure and a horizontal area around $1,907 also probe the bullion buyers ahead of the monthly peak surrounding $1,960. It should be noted that the fears of the coronavirus (COVID-19) and the US-China tension are also on the table to challenge gold’s latest rally.
Meanwhile, a clear downside break of 50% Fibonacci retracement level around $1,860 can drag the gold prices back to the weekly support line near $1,840. However, any further declines will have to drop beneath the 61.8% Fibonacci retracement level of $1,838 to direct bears towards the monthly low of $1,803 and the $1,800 threshold. Overall, gold prices are in an uptrend but short-term consolidations can’t be ruled out.