Gold Forecast and Outlook: The Doji candlestick formation on Wednesday, following Tuesday’s decline, likely suggested that bears were losing control.
This paved the way for the renewed upside in Gold Price on Thursday, which fuelled a bullish break from the descending trendline resistance at $1,808 on a sustained basis.
The upside breakout and the subsequent daily closing above the 200-DMA reinforced the bullish interests.
Although it remains to be seen if bulls can retain control, as the 14-day Relative Strength Index (RSI) continues to inch lower below the midline.
Should the 200-DMA, now support, cave in once again, then Wednesday’s high at $1,830 will emerge as the next cushion for gold buyers.
Further south, the $1,808 demand area will then come into play, below which the trendline resistance now support at $1,797 will be probed.
Alternatively, five-day highs of $1,849 will be retested on buying resurgence, reopening the upside towards the bearish 21-DMA at $1,860.
All in all, gold price is likely to keep its choppy trend intact around the 200-DMA heading into the weekly closing.
Gold Price recovered significantly yesterday. Weaker US dollar lends buoyancy to the yellow metal, which is set to end the week up again for the first time in four weeks, economists at Commerzbank report.
Robust recovery of gold
“The upswing is continuing, meaning that gold may end the week up again for the first time in four weeks.”
“The fact that the US dollar has been noticeably weaker since yesterday is lending tailwind.”
“What is more, a countermovement was overdue following the pronounced phase of weakness since the end of April. The Relative Strength Index (RSI) for example had been trading close to oversold territory for around a week before the price began climbing yesterday.”
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