Gold Closed Last Week At 2-Week High, What’s Next?
Gold prices got a nice boost from FED’s decision to maintain its economic policy unchanged, leading spot to close Friday near a fresh 2-week high set at 1,141.69.
The recovery however, has not been enough to affect the long term negative tone, as the daily chart shows that the price is still below a strongly bearish 100 DMA, around 1,142.90, where the commodity also presents several daily highs and lows. In the same chart, the price has managed to advance well above its 20 SMA, whilst the technical indicators aim higher after crossing their mid-lines, at least enough to limit the downside during the upcoming sessions.
Should the price of gold continue trading higher, the 200 DMA which stands now around 1,174.00 is the level to break to confirm a longer term recovery.
In the 4 hours chart, the 20 SMA has advanced to meet the 100 and 200 SMAs, all three converging in the 1,121.00 region. In the same chart, the Momentum indicator has lost its upward strength, but holds above its mid-line, whilst the RSI maintains its bullish strength around 75, all of which supports additional gains for this Monday, as long as risk aversion remains limited.