Gold pulling back from resistance, are the Bulls finished?
My answer is no the Bulls are not finished. On the weekly time frame we can see a large falling wedge pattern than began to form in 2013. During this time period price also traded primarily below the 50 period moving average, and never sustained a significant move above. Price has sustained a 14% rally from the break of the 50 period moving average without closing below. Price trading above the 50 period moving average is a sign of Bullish strength, as for the better part of the last 3 years price traded below this moving average.
Price is facing resistance at $1300 and the 200 weekly period moving average. $1300 is a strong psychological level, many traders were watching that price due to chart resistance and the round number. Although the pull back for the last 3 weeks has been fast, it has not been very significant relative to the increase price has made in the last two months. It took just over 2 months for price to go from roughly $1000 to $1300, which is a short period of time for a significant rally. A pull back of this magnitude should not be unexpected.
Although the resistance area offered opportunities for short term traders to sell, it offers greater opportunities for long term traders to buy. The best approach would be wait until price clears this level, at which point Gold may resume it's Bull move, and look to test the next significant resistance level at $1400.
I will not be buying anymore gold until the chart offers confirmation with a candlestick pattern.
Price is facing resistance at $1300 and the 200 weekly period moving average. $1300 is a strong psychological level, many traders were watching that price due to chart resistance and the round number. Although the pull back for the last 3 weeks has been fast, it has not been very significant relative to the increase price has made in the last two months. It took just over 2 months for price to go from roughly $1000 to $1300, which is a short period of time for a significant rally. A pull back of this magnitude should not be unexpected.
Although the resistance area offered opportunities for short term traders to sell, it offers greater opportunities for long term traders to buy. The best approach would be wait until price clears this level, at which point Gold may resume it's Bull move, and look to test the next significant resistance level at $1400.
I will not be buying anymore gold until the chart offers confirmation with a candlestick pattern.
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