Gold Battles Resistance as Greenback Slides
Gold had a big rally in June and July. The yellow metal has consolidated since, but now may be attempting a breakout.
This chart shows the downward-sloping trend line on gold that began on August 7. Several patterns may indicate prices are ready to start moving.
First, notice how XAUUSD has held close to the line, unlike its test and breakdown on November 6 and 9. That could suggest it’s losing importance as resistance.
Second, prices are pushing their way up and through the 50-day simple moving average (SMA).
Third, the 10-day DMA has risen above the 50-day SMA. This MA cross worked as a bullish signal on December 23, 2019, and April 1, 2020. It also served as a bearish warning on September 22.
Next, Bollinger Bands Width has squeezed into a tight range.
Additionally, MACD has been rising for most of the month.
The final point is ongoing weakness in the U.S. dollar, currently languishing at 2-1/2 year lows. This is typically a positive for previous metals like gold and silver.
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This chart shows the downward-sloping trend line on gold that began on August 7. Several patterns may indicate prices are ready to start moving.
First, notice how XAUUSD has held close to the line, unlike its test and breakdown on November 6 and 9. That could suggest it’s losing importance as resistance.
Second, prices are pushing their way up and through the 50-day simple moving average (SMA).
Third, the 10-day DMA has risen above the 50-day SMA. This MA cross worked as a bullish signal on December 23, 2019, and April 1, 2020. It also served as a bearish warning on September 22.
Next, Bollinger Bands Width has squeezed into a tight range.
Additionally, MACD has been rising for most of the month.
The final point is ongoing weakness in the U.S. dollar, currently languishing at 2-1/2 year lows. This is typically a positive for previous metals like gold and silver.
TradeStation is a pioneer in the trading industry, providing access to stocks, options, futures and cryptocurrencies. See our Overview for more.
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