Monday, October 15, 2018

Gold breaks through strong resistance as last week's move took it above its 50 day moving average for first time since April 20

With the gold price having been controlled over the past several months by numerous speculators in the futures market who have built a record amount of short contracts, last week's move of over $35 was extremely significant for the sentiment of the precious metal.  And that is because for the first time since April 20, the gold price broke through and has sustained a support above its 50 day moving average.

On a technical level, yesterday’s strong price advance took current pricing above $1,200, a key psychological level of either resistance or support, and more importantly above the 50- day moving average. The last occurrence of gold closing above its 50-day moving average was on April 20. 
Lastly, yesterday’s strong gains took gold prices above the .618% retracement which is currently at $1,217.60. This retracement is from an extremely long data set beginning at the end of 2016 when gold was trading at $1,124 per ounce, up to this year’s record highs at $1,369 per ounce. 
Most importantly yesterday’s dynamic upside move resulted in gold trading out of its defined and narrow trading range for the first time since August. If gold can effectively continue to trade above $1,218 per ounce, it could move to higher ground.  - Kitco
Adding to last week's strong move is today's price rise of over $11 which has seen gold touch on the $1230 handle for the first time since early in the year.  And with increasing volatility in the equity markets, coupled with growing economic turmoil around the world like as we saw over the weekend in Saudi Arabia, it appears that gold may be regaining its place as the one true safe haven asset, which bodes very well for the price going forward at least through the end of the year.

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