Technical Analysis Gold for February 10, 2016

Gold prices edged lower pulling back slightly on Tuesday after 5-consecutive higher highs. Support on the yellow metal is seen near former resistance at 1,178, while short term resistance is seen near the June 2015 highs at 1,204. Momentum on the gold prices is positive as the MACD (moving average convergence divergence) index prints in the black with an upward sloping trajectory that points to higher future prices for the yellow metal.

The one caveat is that the relative strength index (RSI) which is a momentum oscillator that measures the rate of change, is printing a reading of 78, which is substantially above the oversold trigger level of 70, which could foreshadow a correction at some time in the near future. Readings below 30 on the RSI are considered oversold while reading above 70 are considered overbought.