Some indicators show that the yellow metal could extend the bullish momentum above $1,900
Gold prices have accelerated the ascent on Friday, extending gains for the third day in a row. In late September, the bullion derives support from the ascending 100-DMA and staged a bounce from two-month lows registered around $1,848. Today, the bullion exceeded the 20-daily moving average but is yet to confirm the latest breakout on a daily closing basis.
Investors continue to express US stimulus hopes, expecting the negotiations to resume. Against this backdrop, the safe-haven demand for the US dollar has eased, with most currency pairs being in a consolidative mode these days. As dollar bulls retreated, gold has been benefiting from this subdued trading in major USD pairs.
Furthermore, the greenback came under some selling pressure after a fresh report showed that Chinese Caixin Services PMI came in much higher than expected in September, adding to the risk-on mood on Friday.
As for the technical picture, some indicators show that the yellow metal could extend the bullish momentum above the $1,900 psychological level that was capping upside attempts for the past two days. If the bullish bias persists in the short term, the bullion could challenge the $1,920 local resistance next. Once above this level, XAUUSD the $1,970 longer-term target will come back into investor radar for the first time since mid-September.
However, a bullish bias in the daily RSI is too modest to bet on more robust and sustainable gains at this stage. Furthermore, the precious metal may face range-bound conditions at least as long as the Relative Strength Index shows a weak upside slope.
On the four-hour charts, the prices the technical picture has improved since October 6 while the prices exceeded the 20- and 100-SMAs earlier today, suggesting the prices could now challenge the 200-simple moving average in the $1,922 area. Before this, a local pullback could take place in the immediate term.