The precious metal hit levels we had not seen since early January as it moved above the $1,900 mark. It could continue its rally as many traders worldwide see this investment as a safe haven, anticipating inflation and slow economic growth in the medium term. These investors often speculate around current and future economic conditions.
The relative strength index has been on an overbought status for ten trading sessions, and surprisingly the metal continues climbing. It could start a pullback in the short term, which would allow traders to gather strength and attract more investors. It's hard to determine if the price would be able to reach its previous high for the year at $1,959. We do not see this happening in the short term unless a pullback brings the RSI back below 70%.
If the price of gold starts to lose ground, it could find strong support at $1,860, which is our first Fibonacci retracement. The Bollinger bands are wide but closing up at the edge, indicating lower volatility in the markets. These bands also give us a good insight into whether the price is relatively low or high. In this case, the price trades closer to the upper band and is getting close to being considered relatively high.
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