Gold Technical Analysis: Pullback has run into ascending 50-hour MA support

Gold’s pullback from yesterday’s high of $1,242 has stalled at the ascending 50-hour moving average (MA) support of $1,234. A strong bounce from that MA support would reinforce bullish view put forward by the daily chart, opening doors for a convincing break above the Oct. 26 high of $1,243.

Hourly chart

As seen above, gold has taken out the ascending trendline and has charted a bearish divergence of the relative strength index (RSI). The key averages (50, 100 and 200), however, are located one above the other, signaling the path of least resistance is still to the higher side. As a result, a strong bounce from the 50-hour MA could recharge the engines for a fresh move above the recent high of $1,243.

Daily Chart

The metal crossed the trendline connecting the Oct. 26 and Nov. 7 lows earlier this week, signaling a resumption of the rally from the Nov. 13 low of $1,196. The outlook as per the daily chart remains bullish while prices are holding above the ascending 10-day MA of $1,225.

Trend: Bullish