Gold Outlook Mired by RSI Sell Signal

Gold Outlook Mired by RSI Sell Signal

Gold Price Talking Points

The price of gold cleared the opening range for March as the Russia-Ukraine war sparks a flight to safety, but recent developments in the Relative Strength Index (RSI) indicate a near-term pullback in bullion as the oscillator pushes below 70 to reflect a textbook sell signal.

Technical Forecast for Gold Price: Neutral

The outlook for the price of gold remains constructive as the 50-Day SMA ($1863) exhibits a positive slope, but bullion appears to have reverses ahead of the record high ($2075) as it extends the series of lower highs and lows from the yearly high ($2070).

Source: Trading View

Lack of momentum to hold above the $2063 (61.8% expansion) region has pushed the price of gold back below the $1990 (78.6% retracement) area, with a move below the Fibonacci overlap around $1916 (38.2% expansion) to $1929 (23.6% retracement) bringing the monthly low ($1902) on the radar.

Failure to defend the opening range for March may push the price of gold toward $1876 (50% retracement), with a move below the 50-Day SMA ($1863) opening up the $1859 (23.6% retracement).

Need a close above the $2063 (61.8% expansion) region to bring the topside targets back on the radar, with a break above the record high ($2075) opening up the $2092 (161.8% expansion) area.

— Written by David Song, Currency Strategist

Follow me on Twitter at @DavidJSong

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