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Gold’s impressive appreciation stabilizes near record high.
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The bulls might take a break, but stay in play above 2,100.
Gold bulls staged a comeback with a bang, driving the price vertically as high as 2,141 on Tuesday. This is marginally below December’s record high of 2,144 and could induce some consolidation ahead of Powell’s testimony before Congress and Friday’s US jobs data.
In the meantime, the precious metal is looking for another upturn in the four-hour chart after posting a small doji candlestick around 2,125. The technical indicators are not promising at the moment, as the MACD seems to have entered a new negative phase and the stochastic oscillator continues to trend to the downside. Moreover, the RSI keeps moving sideways within the overbought zone, suggesting that the latest bullish action might soon run out of steam.
If the bulls stay in play, the price might attempt to breach the 2,144 ceiling with scope to reach the 161.8% Fibonacci extension of the previous downtrend at 2,152. The 2,175 region might be the next target as the resistance line, which connects the March highs, is positioned around the same territory. A break higher could see a test near the 2,200 psychological mark.
In the event the price flips backwards and beneath 2,125, the price might initially stabilize somewhere between yesterday’s support zone of 2,110 and the key 20-period exponential moving average (EMA) at 2,102. Even lower, the decline might pause around December’s resistance of 2,087 and then near the key constraining area of 2,079.
All in all, gold’s rocket rally might shift into a consolidation phase near the 2023 all-time high in the coming sessions. The two candlesticks, which followed yesterday's peak and have the same body size could be interpreted as a sign of indecisiveness. Nevertheless, the big picture remains positive and as long as the price keeps trading above the 2,100 level and the 20-period EMA, more bullish actions could develop.
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