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Gold Eases Back From All Time High
By FT on October 15, 2009 | More Posts By FT | Author's Website
Today the barman scraped the top layer of froth off the gold rally, but I don’t think it’s much more than that.
October’s been a good month for bling, seeing an $85 move from low to high. But yesterday’s high of $1070 fell away to end the day with a doji reversal candle. Traders took the hint and pushed the price down to a low of $1046, though the price has since recovered to $1054.
This market has been overbought for a while now so a small pullback was overdue. I’m watching MACD momentum trail off a bit and the RSI slip from overbought levels. Note that today’s candle has broken away from the upper Bollinger band; often when this happens the price will fall to test the 21-day moving average. The MAV currently coincides with a good S&R line at around $1020, but before that there’s minor support in the $1040-45 area. I reckon a test of the 21-day MAV trend line would be healthy for the bull case, and could present a good entry point for a long bet.
Having said that, if the Dollar continues to get slaughtered the next move could easily be a re-test of yesterday’s $1070 high.
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