- Gold is chipping away at the 50-hour average resistance.
- A channel breakout on the hourly chart would expose Monday’s high.
Gold is struggling to extend the recovery from the session low of $1,554.80 to levels above the 50-hour moving average (MA) at $1,561.
At press time, the yellow metal is trading at $1,559 per Oz, representing a 0.40% drop on the day, having hit a 6.5-year high of $1,588 on Monday.
The pullback has taken the shape of a falling channel, as seen in the hourly chart. A breakout would imply an end of the pullback and open the doors for a re-test of $1,588.
A breakout looks likely as the hourly chart MACD has diverged in favor of the bulls by forming a higher low.
That said, the 14-day relative strength index is reporting overbought conditions. So, a move above $1,588 looks unlikely.
The ascending 5-day average at $1,544 could come into play if the weekly low of $1,552 is breached.
Hourly chart
Trend: Bearish
Technical levels