Gold prices extended its advance of Friday, with spot reaching a high of $1.168.27, a fresh 6-week high after panic about China’s economic slowdown saw US major indexes suffering one of the worst one-day falls in years.
Spot gold closed the week at its highest in 5-weeks, at $ 1,159.37, right below the 100 DMA. The daily chart shows that the technical indicators are losing their upward strength near in overbought territory, pointing for a possible downward corrective movement ahead.
Nevertheless, this latest recovery suggests an interim bottom is in place, and that the bulls will likely continue pressuring higher.
Talking about the shorter term picture, the 4 hours chart shows that the Momentum indicator has already begun to correct lower, although the RSI indicator has managed to bounce from the 70 level, and maintains a tepid bullish slope in overbought levels.
In the same chart, the 20 SMA heads sharply higher around $ 1,140.25, the probable bearish target in the case of a bearish corrective move.