6th day in a row with the price trading above and below the 100 day MA
Back on the October 11th on a large down day in stocks, the price of gold finally found a "flight into safety bid". It may have been helped by short covering but on the day, the low was down at $1191 and the high extended to $1226. The high since that day has reached $1233.33 and the low at $1215.04.
The last 5 days has seen an even narrower range of $1218.78 to $1232.47. Moreover, the price has traded above and below the 100 day MA (blue line in the chart above) at $1224.78 over the last 6 days. The market is unsure of which way to tilt. At some point, the market will decide and the price will make another run.
Levels to eye on the downside would be the $1214.35 level. That was the highest high since the end of August until the break higher last on October 11th. The low on October 12th could only get to $1215.04. A move below would likely solicit more selling.
On the topside, a momentum move away from the 100 day MA will have traders looking for a break of the 38.2% retracement of the move down from the April high at $1238.64. Putting things into perspective, the price rise has still not breached the 38.2% which is the minimum if buyers are to really look to take control.
Drilling to the hourly chart below, an early clue to the next bias should be tipped off by the 200 hour MA (green line in the chart below).
The consolidation over the last 7 trading days has allowed the 100 and 200 hour MA to catch up with the price. The 100 hour MA has been broken and the price trades below it at $1225.20 (blue line). However, the 200 hour MA has not been broken. That MA comes in at $1220.47 (green line in the chart below).
Stay above the 200 hour MA and get back above the 100 hour MA would be bullish.
A break below the 200 hour MA would tilt the bias back to the downside.
