Gold prices rallied on Friday to rise above 1150 to a two-week high as bullion took advantage of a weakened outlook for the dollar. Prices have risen above the Ichimoku cloud but remain well below the 200-day moving average and within the narrowing trading range that’s been forming since July, giving a somewhat mixed outlook for the medium term.
The 61.8% of the Fibonacci retracement level of the May-July downleg is the key resistance level at 1170.50 that gold needs to overcome to strengthen the upside momentum for a push above the 200-day moving average. To the downside, the 38.2% of the Fibonacci retracement level at 1132.50 acts as a support level that would keep prices above the cloud.
Looking at the intra-day chart, the upside bias is weakening as both the RSI and the stochastics are falling, though they remain in comfortably in bull territory.
Risk Warning: Forex, Commodities, Options and CFDs (OTC Trading) are leveraged products that carry a substantial risk of loss up to your invested capital and may not be suitable for everyone. Please ensure that you fully understand the risks involved and do not invest money you cannot afford to lose. Please refer to our full Risk Disclosure.