Gold Holds Near 2½ Month-Low, Bearish Bias

Gold prices reached a recent two-and-a-half-month low of 1,750 on Tuesday, leading the market in a bearish trend. The 20- and 40-period simple moving averages (SMAs) go slightly south as well as the Ichimoku lines in the 4-hour chart.

Looking at the technical indicators, the RSI is moving lower in the negative territory, confirming the recent downside; however the stochastic oscillator is trying to regain some ground by jumping over the bestselling region.

If the price continues the selling interest, immediate support could come from the new low at 1,750 before dropping to the 1,724 barrier. Stronger losses could open the door for the trough on March 31 at 1,724.

In the opposite scenario, a higher climb could find resistance around the short-term SMAs between 1,773-1,775. Rising above this area would help shift the focus to the top at the 23.6% Fibonacci retracement level of the down leg from 1.916 to 1.750 at 1.790, which stands within the Ichimoku cloud. Also breaking this level, the commodity could revisit the 1,798 and 1,808 levels before pausing its move at the 38.2% Fibonacci at 1,813.

Soon, the bearish phase remains playable especially if gold prices continue to trade below the short-term SMAs and below the key 1,800 level. In the bigger picture, the market was also in a negative correction.