11 Aug 2020
Gold Price Analysis: Under pressure as daily chart shows bearish divergence
- Gold is feeling the pull of gravity during Tuesday's Asian trading hours.
- Gold's daily chart stochastic has diverged in favor of the bears.
- RSI continues to report overbought conditions with an above-70 print.
Gold is trading in the red near $2,017 per ounce at press time, having put in a record high of $2,075 on Aug. 7.
The pullback has confirmed the bearish divergence of the daily chart slow stochastic indicator. A bearish divergence occurs when an indicator prints lower highs against higher highs on price and is widely considered a sign of ebbing of bullish momentum.
The 14-day relative strength index (RSI) is also echoing similar sentiment with an above-70 or overbought reading.
The yellow metal risks falling to the ascending 10-day simple moving average (SMA) support located at $2,007. A violation there would expose the psychological support of $2,000.
On the higher side, the hourly chart lower high of $2,049 is the level to beat for the bulls. A break higher would open the doors for a re-test of the record high of $2,075.
Daily chart
Trend: Bearish
Technical levels