Gold: Bulls to look for the $1900 level

Gold (XAU/USD) continued its five-day surge and refreshed nine-year high at $1898.44 on Thursday. Now is trading just above the critical support at $1885 but bulls are still at the helm according to technicals indicators. The yellow metal is also supported by intensified Sino-American tensions, FXStreet’s Dhwani Mehta briefs.

Key quotes

“The yellow metal is set to extend its upbeat momentum, as the greenback remains pressured by the latest report that the Republicans delayed the announcement of a $1 trillion stimulus package amid lingering disagreements. Additionally, gold could also take advantage of the intensifying risk-off trades after Beijing ordered the US to close its consulate in Chengdu, in a tit-for-tat response to the Houston closure.”

“Bulls are likely to remain in control as long as the price manages to stay above the critical $1886/85 region, the confluence of the bullish 21-hourly Simple Moving Average (HMA) and rising trendline support.”

“The upside bias appears intact as the hourly Relative Strength Index (RSI) stays above the midline, in the bullish territory. Therefore, the price could see a fresh leg higher towards the multi-month highs before testing the $1900 level. If the bulls take out that level, the next hurdle at the rising trendline resistance of $1908 could be challenged en route the record high of $1921.17.”

“A convincing break below the critical support zone at $1886/85 will confirm the rising channel breakdown, triggering a fresh corrective slide in the metal towards the upward-sloping 50-HMA at $1873.23. The next downside target is aligned around $1850, where the bullish 100-HMA lies.”