Gold Dives In Near Term, Bullish In Medium-Term

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Gold prices have been declining over the last two sessions, drifting below the 20-day simple moving average (SMA) and the 50.0% Fibonacci retracement level of the down leg from 2.074.89 to 1.676 at 1.875.

Looking at the momentum indicators, the stochastic oscillator posted a bearish crossover within the% K and% D lines, while the RSI plunges into the negative territory. Moreover, the MACD slides below its trigger line, remaining in the positive region.

If the bears push the market below the 1,855 support and the bullish cross within the 40- and 100-day SMAs, the 38.2% Fibonacci level of 1,826 may stop the declining movement. Crude declines could open the door for the 1,800 handle ahead of the 23.6% Fibonacci of 1,768.

On the other hand, a successful attempt beyond the 50.0% Fibo of 1,875 would take the market to the resistance area 1,918-1,919, which encompasses the 61.8% Fibonacci. All progress over this barrier could send the bulls up to 1.965, maintaining the median limit.

Overall, the yellow metal has a sideways bias very soon, however the rebound of 1,676 holds the medium term bullish outlook.

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