Wednesday, October 5, 2016

What Happened with Gold? 10/5/2016

I was watching the charts when gold liquidated hard yesterday, wasn't in the trade yet watched several do well.   The move on the intraday time frame was large and made lots of news.   

Looking at the move on the 1 year chart suggests that the price of gold (in coarse round numbers between 1300-1400) during the Summer of 2016 was considered too expensive.

A retreat to a price level earlier in the year was appropriate.  Again, in coarse round numbers, this would be between 1200-1300.  What will be important is watching if the faster SMA's catch up and price becomes accepted in this lower range.

Zooming back and looking at the 20 year chart, gold is still above it's 20 year POC.

Is the sky falling? A reversion to the mean would be a better technical description.

I can see either price jump back into the 2016 Summer Range or become accepted in the 1200-1300 range. More likely, I suspect price will be filling in the low volume area between these two regions, what I like to refer to as the "welding zone"....

To Be Continued....