Gold Reaches Another Milestone This Week
Goldfutures finished the day with moderate gains, as the most active December Comexcontract closed $3.80 higher at $1,236.20. Although gold prices finished higher on the week, after gainingapproximately $ 6.00, price advances were limited once again by dollarstrength.
That being said, gold prices have managed toincrease in value now for the fourth consecutive week. Another noteworthycharacteristic this week was the intra-day high of $1,246 that was hit in tradingtoday. Today's high matched up preciselywith the 50% Fibonacci retracement which is at $1,246.40. This price point hasnow defined current price resistance. The former resistance which occurred at the 0.618% retracement ($1,217.00) hasnow become a critical area of support.
OnMonday, gold pricing opened just at the 100-day moving average and closedslightly lower on the day. On Tuesday, gold exhibited a brisk upside move closing above the 100-day moving average forthe first time since the end of April.
Markettechnicians utilize three distinct moving averages with the time cycles of 50,100, and 200 days to determine if a commodity is trending on a short,intermediate, or long-term cycle. When acommodities price trades below all three moving averages, it is believed thatthe market is in a bearish trend.
Toidentify a key reversal in a market that has been in a defined bearish trend,it first needs to break and close above the shortest-term moving average, the50-day. A close above this moving average offers the technician evidence that amarket has pivoted and has now entered a short-term bullish trend.
Thatevent occurred on October 11 in gold, when prices surged over $30 in a singleday and effectively closed above gold's 50-day moving average.
This week gold pricing reached another milestone when on Tuesday, October 23,gold prices traded and closed above the 100-day moving average. This indicates a real potential for the currentshort-term trend to become an intermediate trend. This is a strong indication that gold prices will move higher nextweek.
Thenext major milestone for gold's current trend would occur if and when pricingmoves and closes above the 200-day moving average, signaling that the currentrally in gold has matured into a long-term trend.
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Wishing you as always, good trading,
By Gary WagnerContributing tokitco.com
Follow @garyswagner
gary@thegoldforecast.comwww.thegoldforecast.com Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.  |