Gold reclaims the 100-day moving average as buyers regain technical control
Key Takeaways
- •Gold rebounded to an intraday high of $4,427.65 and traded near $4,422 after moving back above its 100-hour and 100-day moving averages, a shift analysts say favors buyers in the short term.
- •The $4,384–$4,391 area containing both key moving averages is now the critical close-risk zone, and a fall back below it would weaken the bullish picture and put the rising 200-hour average at $4,336.19 in focus as a downside target.
- •Last week gold climbed to a high near $4,450 before reversing and sliding toward $4,350, where buying interest halted the decline.
- •A break above last week's high near $4,450 would bring the 200-day moving average at $4,491 into play, a level gold has not traded above since June 5.
- •On August 5, gold based near $4,061, where the 100- and 200-hour moving averages helped establish a floor before the subsequent move higher.
Gold climbed to a high near $4,450 last week before reversing course and slipping back below two closely watched technical levels: the 100-day moving average at $4,390.87 and the 100-hour moving average at $4,384.33. The pullback extended toward $4,350, where buyers stepped back in and stemmed the decline.
The technical picture has improved in the latest session. Gold has moved back above both the 100-hour and 100-day moving averages, and the renewed buying momentum has carried the price to a high of $4,427.65. The metal is currently trading near $4,422.
From a technical perspective, the move back above those key moving averages is a bullish development that shifts the short-term bias more firmly in favor of the buyers, according to the analysis. It also puts a recent pattern of support and recovery back in focus, with traders using those moving averages as reference points for whether momentum can hold after the earlier pullback.
The $4,384–$4,391 area now becomes the key close-risk zone for buyers. Staying above those moving averages keeps the buyers in control and supports a continued move higher. Conversely, a move back below both levels would weaken the bullish technical picture and shift the short-term bias back to the downside. If that occurs, the rising 200-hour moving average at $4,336.19 would become an important downside target.
Moving-average support has played an important role in gold's recent advance. Back on August 5, the price based near $4,061, where the 100- and 200-hour moving averages helped establish a floor before the subsequent move higher.
On the topside, the first major target is last week's high near $4,450. A break above that level would put the 200-day moving average at $4,491 firmly in play. Gold has not traded above its 200-day moving average since June 5, making that level particularly important in the broader technical setup. A sustained break above it would strengthen the bullish technical structure and open the door for additional upside momentum.
Key levels:
- Bullish above: $4,384–$4,391
- First upside target: $4,450
- Major upside target: 200-day MA at $4,491
- Downside target on a failed break: 200-hour MA at $4,336.19
In an accompanying video, the analyst breaks down the technical levels in play, shows how the move back above the key moving averages has shifted the bias, and outlines the risk levels and upside targets traders should be watching.
Source: ForexLive