Gold's 200 day MA and 100 hour MA converge. What next?

Trades above and below the key level.

Gold has been running higher in October on expectations that US interest rates would remain on hold for longer than expected. This has weakened the US dollar. A weaker dollar makes gold more affordable for investors who hold other currencies.

On the move higher, the price moved above the 200 day MA (green line in the chart above) at the 1175.904 level currently). That helped propel the pair higher on Wednesday of last week. The next target at the 50% retracement (move down from the 2015 high) at 1189.074 was reached and breached on Thursday. However, momentum and stalled, and after reaching a high at 1189.79, the pair has been correcting lower.

The corrective momentum lower, has taken the price back down toward the key 200 day MA (see green line in the chart above). Today, the price has been trading above and below that MA level.

Looking at the hourly chart below, the correction lower has allowed for the 100 hour moving average (blue line in the chart below) to catch up with price. Today the price fell below that MA line (more bearish) The price decline has stalled near the 50% of last week's trading range at the 1171.40 level AND upside trend line support. Another level to eye below.

The 100 hour MA is currently located right at the level of the 200 day MA and the price of the precious metal has been trading above and below both MAs over the last few hours.

With both the 100 hour MA and the 200 day MA at the same level as the current price, Gold traders are at a balance level. Eventually, the pair will need to make the next directional judgement. Does it base and run back higher - in which case look for a momentum play above the MA levels AND a break of the trend line topside trend line on the hourly chart below (at the 1178.25 area). Or will the correction lower continue with a break of the 50% at the 1171.40 level helping to signal more downside potential. The battle lines are drawn....

PS. We are just now seeing a quick move lower. The lower target with the 50% at 1171 being approached for another test.