Gold has been trending higher for a while now as traders hopped on the risk/safety trade going into the US election. Also higher inflation fear may have conttibuted. Finally, technicals were a help.
Looking at the daily chart below, apart from a day or two in February, the price has traded above the 100-day MA (blue line on the chart below) for every other day of the 2024 year. That MA is still well below at $2534.81. The current price is at $2619.79. Getting below it would be needed to give the sellers more control from a longer-term perspective.
Drilling down to the hourly chart below, the price trend move to the upside has seen corrective moves this year. More specifically, the price has alternated from trending with the price trading above the 100 and 200-hour moving averages, to correcting when the price fell below those moving averages.
On October 31st the price moved back below its 100-hour moving average. On November 1, and again on November 6 and November 8, the price retested the 100-hour moving average (on upside corrective moves) and found willing sellers against that moving average level. The sellers stayed in control at least in the short term (see three red arrows on the chart below).
In trading today, the momentum has increased to the downside with the price moving from a high of around $2675, to a low of $2610.52. The price is currently trading at $2619 down -$64 or -2.38%.
What next?
Looking at the hourly chart, the price is approaching a swing area going back to September and October (see red numbered circles and yellow area on the chart below) that area comes between $2598 and $2604. Also in play is the 38.2% of the move up from the June 2024 low to the October 30 high. That level comes in at $2598.06.
Getting below the 38.2% retracement is the minimum retracement target that shows the seller’s mean business. Absent that, and the correction is just a normal correction in a trending market.
Traders will be watching that area for short and medium-term clues today and going forward. A move below will have traders looking toward the 50% midpoint at $2538.70 area. Around that area is also the rising 100 day moving average at $2534.80 increasing the areas importance. Be aware.