user 69773
New member
- Joined
- Dec 6, 2022
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I was doing some technical analysis on the gold futures price chart this afternoon and thought I would share this with you. As you can see highlighted on my chart, there are a pair of red and blue lines. These lines are the Red 50 day moving average (the average price of gold futures over the last 50 days) and the Blue 200 day moving average (the average price of gold futures over the last 200 days), respectively. Generally, when the 50 average crosses below the 200 average, investors and institutional traders take that as a sign of a bear market. We call that a Death Cross and we're trading short and pushing the market down. Conversely, if the 50 crosses above the 200 then we call that a Golden Cross, take that as a bullish signal and start trading long, pushing the market up.
There was this article here: Could gold’s 200-day moving average become a technical level of support? that I found interesting, especially since I was watching the same thing on the same chart and asking the same question. Is gold going to build support off from that 200 moving average and go higher? Right now gold futures price seems to be in an area where a few things can happen. Technically, it is still in a bearish trend. However, it is well above the 50 moving average which suggests, as the article above highlights, that the next level of resistance for the market to test is the 200 moving average which is sitting around $1823.4. What the author is asking is: will price break above that 200 moving average and continue higher. If it builds support off from that 200 line, it will presumably go higher. Short of some unseen/unkown economic even that sends gold back down.
But, let's look at this more closely. Just to the left and below where price currently is, you can see on my chart an area highlighted as a triple bottom. This is where price tried 3 times to get below structure and couldn't do it. It also lost a lot of the downward momentum as outlined by the black/green oscillator below the chart That is a strong reversal indicator. After a reversal like that, the most obvious "mean" for price to reverse to is where it last reversed, way up over 2k. How's it going to get there?
As price begins to move up, notice the oscillators at the bottom of the screen. Specifically, the black/green lines. This is called MACD and is a momentum indicator. You can clearly see that when price started going up, so did momentum. When price broke above the Yellow Line and got into the range of the White dotted line just above it (these are pivot points and show traders points of technical support and resistance), momentum started trailing off but is still holding above 0. It's also using that white dotted line to build some support off from, presumably to try and go higher and test the 200. There is also a monthly pivot point in the same area where there is a green line marked R1. Both are significant levels of support and resistance.
I think what happens in here over the next few days to weeks will determine whether gold goes up or down. If price starts getting daily closes above the 200 moving average and building more support it will most likely be headed back up to the $2,000 range long term. It could also see some selling with a pause in buying and price could test lower, maybe back down to the $1735-$1699 range.
I think over the short term, were looking at a little push higher, above the 200 moving average and into that R1 line. After that I think I am expecting to see a little bit of consolidation between $1837 and $1786 before the market tests higher; maybe even seeing a Golden Cross which would put the gold markets back in a strong bullish trend for early next year. Time will Tell. I could always be wrong LoL It happens. I'll recap next Sunday and see what price did, what I got right and what I got wrong.
There was this article here: Could gold’s 200-day moving average become a technical level of support? that I found interesting, especially since I was watching the same thing on the same chart and asking the same question. Is gold going to build support off from that 200 moving average and go higher? Right now gold futures price seems to be in an area where a few things can happen. Technically, it is still in a bearish trend. However, it is well above the 50 moving average which suggests, as the article above highlights, that the next level of resistance for the market to test is the 200 moving average which is sitting around $1823.4. What the author is asking is: will price break above that 200 moving average and continue higher. If it builds support off from that 200 line, it will presumably go higher. Short of some unseen/unkown economic even that sends gold back down.
But, let's look at this more closely. Just to the left and below where price currently is, you can see on my chart an area highlighted as a triple bottom. This is where price tried 3 times to get below structure and couldn't do it. It also lost a lot of the downward momentum as outlined by the black/green oscillator below the chart That is a strong reversal indicator. After a reversal like that, the most obvious "mean" for price to reverse to is where it last reversed, way up over 2k. How's it going to get there?
As price begins to move up, notice the oscillators at the bottom of the screen. Specifically, the black/green lines. This is called MACD and is a momentum indicator. You can clearly see that when price started going up, so did momentum. When price broke above the Yellow Line and got into the range of the White dotted line just above it (these are pivot points and show traders points of technical support and resistance), momentum started trailing off but is still holding above 0. It's also using that white dotted line to build some support off from, presumably to try and go higher and test the 200. There is also a monthly pivot point in the same area where there is a green line marked R1. Both are significant levels of support and resistance.
I think what happens in here over the next few days to weeks will determine whether gold goes up or down. If price starts getting daily closes above the 200 moving average and building more support it will most likely be headed back up to the $2,000 range long term. It could also see some selling with a pause in buying and price could test lower, maybe back down to the $1735-$1699 range.
I think over the short term, were looking at a little push higher, above the 200 moving average and into that R1 line. After that I think I am expecting to see a little bit of consolidation between $1837 and $1786 before the market tests higher; maybe even seeing a Golden Cross which would put the gold markets back in a strong bullish trend for early next year. Time will Tell. I could always be wrong LoL It happens. I'll recap next Sunday and see what price did, what I got right and what I got wrong.
