Important technical points
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Successful defense: Buyers of gold took advantage of yesterday’s price drop, using it to boost the market and effectively defending the 100-hour moving average.
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Current momentum: Overall, precious metal prices rose by $37 (+0.85%), reaching an intraday peak of $4349.50.
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Immediate growth goals: Bulls seem to be aiming for a new daily closing record, targeting $4355.62, with the top price for the day being $4381.84.
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Trend line resistance: Gaining new heights brings the daily channel trend line closer to focus at $4419.64.
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Downside risk: The bullish stance remains intact as long as prices stay above the climbing 100-hour moving average, currently around $4301.
Buyers resurface: rebound from 100-hour moving average
The current increase in gold prices can be traced back to a technical assessment made yesterday. After a minor setback, the price touched the 100-hour moving average, an important short-term indicator.
Efforts by sellers to drop prices below this key level did not succeed, thanks to responsive buyers who stepped in to uphold the trend. This failure on the sellers’ part encouraged the bulls to reengage, pushing prices higher. During today’s trading, that upward momentum has continued, reaching session highs of $4349.50.
Bullish case: Charting a path to new record highs
With the 100-hour moving average well-established as support, the easiest route seems to be upward. Traders are currently watching a defined set of resistance levels.
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Friday’s high price ($4353.57): The initial challenge is last Friday’s swing high.
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Highest daily closing price ($4355.62): Just beyond that lies the record closing price from October 20th. Closing above this could signal a stronger bullish trend.
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Intraday high price ($4381.84): Once the closing price is cleared, the next goal is the intraday peak.
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Channel resistance ($4419.64): If gold breaks into “blue sky” territory above prior highs, attention shifts to the upper channel trendline, which is now estimated at $4419.64 and continues to rise.
Bearish scenario: What would turn the tide?
Even with the bullish momentum, traders need to stay cautious. The 100-hour moving average has now moved to about $4301, marking a significant boundary.
For sellers to reclaim control, prices need to fall below this moving average. A sustained drop below $4,301 could lead to further downside, potentially targeting the 200-hour moving average, currently rising near $4254.19.
Bottom line: Buyers remain in control.
In sum, the technical picture is straightforward. Although sellers made a play during the dip to the 100-hour moving average, they couldn’t capitalize on it. By maintaining that support, buyers have reaffirmed their dominance in the market. As long as this support level holds, eyes will be set on future all-time highs.
