The price of gold traded at its low for the week on Monday, but sellers could not sustain the downside momentum. The bearish bias began to deteriorate as the price moved back above its 100-hour moving average, a downward-sloping trendline, and its 200-hour moving average. Holding those levels as support during Tuesday’s trade gave buyers the confidence to extend higher, with the price reaching its high for the week at $4,166 on Wednesday. However, that rally stalled below the key July swing highs at $4,180 and $4,203, allowing sellers to regain control.
The price then rotated lower, breaking back below both the 100-hour moving average (near $4,072) and the 200-hour moving average (near $4,047) on Thursday. However, the decline found willing buyers near a key swing support area at $4,022, a level dating back to May and June. Since then, gold has rebounded and is now trading between the 100-hour and 200-hour moving averages, leaving the technical picture neutral.
Going forward, traders will be watching for a break above the 100-hour moving average near $4,072, which would tilt the bias back in favor of the buyers. Conversely, a move below the 200-hour moving average near $4,047 with momentum would shift control back to the sellers. Until one of those levels is broken decisively, the market remains in a wait-and-see mode.
This article was written by Greg Michalowski at investinglive.com.
