In an intermediate uptrend, gold prices have almost retraced up to 61.8% from the lows of 1046.54 to the recent highs of 1263 levels in the consolidation phase, but for, this Fibonacci level has acted as a stiff resistance and the failure swings have evidenced the price drops to the current 1203.31 levels (refer monthly charts).
On daily charts, every the attempts of bouncing back are restrained at 7DMA stiff resistances, as a result, shooting stars appearing at the same juncture to drag slumps below DMAs again.
While both leading and lagging oscillators are conformity to the selling pressures.
RSI and stochastic curves are converging to the price slumps to indicate the strong selling momentum.
While current prices on these timeframes have consistently sliding below DMAs and EMAs, MACD on the other hand also evidences bearish crossover that is again one more indication of bearish trend continuation.
To substantiate this stance, 7DMA has crossed below 21DMA which is again bearish signal.
Next strong support is only seen between 1175-1180 region.
Fundamentally, Federal Reserve’s rate hiking standpoint is intensifying the bearish sentiments in bullion markets, which could hamper the bullish outlook of this precious metal in the months to come.
For an intraday speculation, we advocate buying tunnel spreads with upper strikes at 1208.7700 (7DMA) and lower strikes at 1194 levels (lower BB).
