- Gold Hits Record High After Two-Week Rally
- Technical Analysis Indicates Potential Slowdown
Gold achieved a new all-time high of 2,631 on Monday after an impressive two-week rally, marking a 5% price surge.
However, technical indicators such as the RSI and stochastic oscillator suggest that the precious metal is currently overbought. The price is hovering near the upper Bollinger band and the upper boundary of an upward-sloping channel, increasing the likelihood of a downside correction or consolidation. Analysis of Elliot waves points to a potential pause in the bullish pattern as wave 3 nears completion.
If the price remains below the channel’s resistance line at 2,640, attention will shift to the 2,530-2,550 support zone, including the 20-day SMA. A break below could find support near the 50-day SMA at 2,480 and the flat line that initiated September’s uptrend at 2,465, with further downside potential to 2,425.
On the upside, a continuation above 2,640 could face resistance at the psychological level of 2,700, followed by a retest of the ascending trendline connecting previous highs at 2,800.
In summary, while the current bullish trend in gold may lose steam soon, any pullback could be temporary as long as the price remains above 2,465.
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