Gold Price Talking Points

Gold prices cleared the opening range in March as the Russia-Ukraine war sparked risk aversion, but recent developments in the Relative Strength Index (RSI) suggest that as the oscillator fell below 70 to reflect the recent pullback in gold prices. Textbook sell signal.

Gold price technical forecast: neutral

The outlook for gold remains constructive as the 50-day SMA ($1863) shows a positive slope, but gold appears to be reversing before hitting record highs ($2075) as it extends a series of lower highs and lower highs ($2070) from the year-to-date.

Resources. Trading View

Lack of momentum to stay above the $2,063 (61.8% expansion) area has pushed gold back below the $1,990 (78.6% retracement) area, below the Fibonacci overlap of $1,916 (38.2% expansion) to $1,929 (23.6%) retracement) bringing the monthly low ($1,902).

Failure to defend the March opening range could push gold to $1,876 (50% retracement) and a break below the 50-day SMA ($1,863) would open up $1,859 (23.6% retracement).

A close above the $2,063 (61.8% expansion) area is needed to bring the upside target back into focus, with a break above the all-time high ($2,075) opening up the $2,092 (161.8% expansion) area.

– By David Song, Currency Strategist

Follow me on Twitter @DavidJSong

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