Gold and Silver Face Key Resistance in Q2 Technical Outlook amid Market Tension.

Gold began the first quarter of 2024 on a strong note, continuing the upward momentum from late 2023. The XAU/USD surged to new all-time highs, surpassing $2,150 and peaking at $2,222. Despite a slight pullback, the precious metal remains close to record levels.

While the technical outlook for gold remains bullish, caution is warranted as the 10-week RSI indicator suggests possible overbought conditions. Rapid market extensions often lead to corrective pullbacks, albeit potentially temporary or minor.

In case of a bearish turn, support levels are identified at $2,145 and $2,070, as depicted in the attached weekly chart. Bulls must defend these levels; failure may trigger a retracement towards the 200-day simple moving average around $1,985, followed by channel support at $1,920 and $1,810.

Conversely, if bulls maintain control and push prices higher, initial resistance lies at the $2,222 record high. While breaking this barrier may pose challenges, a successful breakout could fuel further upside momentum towards channel resistance at $2,255.

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