Gold is in a medium-term upward movement. As part of this movement, the precious metal broke through the buy trigger area of a multi-year ground formation in mid-June 2019. Then the price of the precious metal skyrocketed to a high of $ 1,557. After a consolidation in a bullish wedge, this formation broke out on December 23. This breakout triggered a brief, steep rally that led to a high of $ 1,595.42 today.
With this high, gold was slightly above the 61.8% retracement of the downward move from the September 2011 all-time high. This retracement is at $ 1,586.93. However, the upper limit of the upward movement since December 2015 at USD 1,594.32 has proved to be too high a hurdle. Gold bounces off intraday clearly. After the run of the past few days, gold is now significantly oversold.
Is the gold hype over yet?
From a long-term perspective, the gold chart remains bullish. Due to the large ground formation, the target is around $ 1,800. This goal has not yet been jeopardized.
In the short term, however, things look different. The run of the last few days is likely to end today in the important resistance range between $ 1,586.93 and $ 1,594.32. As long as gold does not break this resistance area significantly, there is a risk of a reset towards USD 1,538.22 or even USD 1,502.89. An outbreak, on the other hand, could accelerate the trend again. In this case, gold could gain around $ 100 in a rapid rally.