Gold has been in hot form since the beginning of this year, and has been profiting for eight consecutive weeks. This is the first week that winning streak is currently under threat, with gold falling 0.7% per week. It owes yesterday's drop and it's important to be aware of changes in the technical line while gold is now restrained at over $2,900.
Gold (Xau/USD) Hourly Rate Chart
The short-term chart shows just how unforgiving the bullish momentum has been since the turn of the year. Price Action has surpassed both the 100-hour (red line) and the 200-hour moving average over the past seven weeks. There were some major short-term level tests, but there was no definitive break at all.
That's all we saw yesterday in autumn. Dipbuyer returned quickly, but the rebound was arrested on the 200-hour moving average itself.
Previously important short-term support levels have now turned into important short-term resistance to gold. In other words, sellers are currently defending that level in their attempt to maintain a shift in negative side bias since yesterday.
This now puts money in a rather interesting position this week. It's been a while since I saw the technical line move to the other side. So will the seller be capitalized to go for a stronger pullback? And for the Bulls, will this see some additional benefits in light of changing technical considerations?
However, our daily and weekly charts have not yet been lost much even if we move up. However, every retracement starts with a small step and it's important to be aware of this in case you start collecting your pace.
