Gold closed above $3,300 on Thursday but slipped back below here early this morning.
Gold prices have traded within a rough range of $3,250 and $3,350 for over a week now. Gold has had a stunning bull run this year, building on steady gains made after it hit a multi-year low of $1,050 in December 2015.
The rally really took off in February last year once gold finally managed to break decisively above $2,000 – a level which had repeatedly worked as a limiter to gold’s upside progress. It hit a record high of $3,500 just over a month ago. But the pace and size of the rally, which took it there, left gold very overbought.
It subsequently pulled back, hitting a five-week low of $3,120 just over a fortnight ago. This brought the daily MACD back down to neutral levels, giving the precious metal some room to the upside. But it has lost some upside momentum and has been unable to make much progress above $3,300. The outlook is currently unclear.
Source: TN Trader
Gold may manage to consolidate within its current range, and build sufficient momentum for another push higher. But it’s also possible that it needs a deeper pullback before fresh buyers come in. Of course, it’s also possible that gold has already topped. Although history suggests that it has yet to achieve the ‘mania’ stage that has marked the end of prior muti-year rallies.
