Originally published by AxiTrader
At its peak in late February gold had rallied around 12.5% from the late 2016 lows and was trading at $1264 an ounce. That took it briefly, for 15 minutes if I recall correctly, above the 200 day moving average.
But as is so often the case that average - which many traders use as an indication of the bull/bear status of the market - proved too hard a nut to crack. Gold subsequently pulled back to $1194 - 50% retracement of the 2016-2017 rally - before launching the run which again took prices above $1260 an ounce on Tuesday.
Again gold traded briefly above its 200 day moving average and again it could not close above it on.
Last night gold traded to a high around $1258 and yet again found the 200-day moving average a level through which it could not push.
The price action is the continuation of what has been very technical trading in gold over the course of this rally from the 2016 lows.
Sure fundamentals like bond rates and the US dollar are also key drivers of gold. So it's worth noting that the dual failure to break over the past two days has been accompanied by both the US dollar and US rates stabilising and moving higher.
But clearly traders are eyeing the charts, technicals and important levels.
To that end my system isn't short yet. But if gold trades below $1246 - yesterday's low - I'll be short with a stop above the recent high.
If, on the other hand, $1265 breaks gold could run toward overhead trendline resistance around $1300 and potentially the 138.2% Fibonacci projection at $1318.
Have a great day's trading.