Gold price saw a surprise rally after breaking resistance levels of $1,900 and $1,878. Technically, bullish momentum is still intact. Nevertheless, a rising wedge formation signals a trend reversal, economists at ANZ Bank report.

Macro environment not supportive enough to sustain the current price level

“Momentum looks strong until price trades above $1,800 level. However, prices need to continue settling above $1,900 to maintain this momentum.” 

“We believe the macro environment is not supportive enough to sustain the current price level.”

“We notice that there is a rising wedge formation in the daily technical chart. Should prices fall from current levels to the $1,870-1,900 range, we expect trend to reverse.”

“Below $1,800 gives a confirmation of price falling fall back to $1,730.”