Gold is extending higher today and testing its falling 100-hour moving average near $4043. That level is the short-term barometer for buyers and sellers. A move above—and the ability to stay above—would give buyers more confidence after last week’s sharp decline. Stay below, and sellers retain the technical advantage.
Sellers took control below the hourly moving averages
The bearish move gathered momentum after gold broke below its 100- and 200-hour moving averages near $4153 on October 19. Subsequent attempts to recover found sellers leaning against those moving averages. The resistance held, giving traders a defined level to limit risk and keeping the sellers in control.
On October 22, the price accelerated lower, moving away from the moving averages and breaking below the early October low near $4065. That break opened the door for another extension lower, with the price reaching a low near $3974 on October 23.
The technical story was clear: the moving averages held as resistance, support broke, and sellers pushed toward the next downside targets.
The $4000 level becomes a pivot
Since reaching that low, gold has been trading above and below the natural $4000 level. The selling has slowed, and buyers have been able to put together a recovery. However, holding near $4000 is only part of the process. Buyers also need to reclaim resistance levels that have helped define the downward move.
Below the recent $3974 low, the broader chart highlights a key swing area between $3942 and $3959. That area includes lows from June and July and remains an important floor. Sellers would need to get below that area—and stay below—to open the door for further downside momentum.
For now, buyers have kept the price above that support zone and are challenging the first significant moving-average hurdle.
The $4043 level is the short-term barometer
Today’s recovery has brought the price back toward the 100-hour moving average near $4043. The question is whether sellers use that level to stall the rally again, or whether buyers can force a break and build on it.
A sustained move above would shift the short-term bias in the buyers’ favor and make the moving average a close risk level. Buyers would then want to see support develop against it on a retest.
Conversely, a move above followed by a quick reversal below would be a failed break. That would undermine the recovery and give sellers a reason to push back toward $4000, followed by $3974.
Above $4043, the next targets are $4065 and the 200-hour MA
If buyers can establish support above the 100-hour moving average, the next upside target comes near $4065, the early October low that gave way during last week’s decline. Previous support can become resistance, making that another test of the buyers’ strength.
Get above $4065, and the focus shifts to the falling 200-hour moving average near $4096.50. Moving above that level would put gold back above both hourly moving averages and strengthen the technical case for a broader recovery.
The buyers are making a play, but they still have work to do. The first requirement is to get above $4043 and stay above it. That would give them a platform to target $4065 and then $4096.50. Until then, the recovery remains vulnerable to sellers leaning against resistance.
Below is the technical ladder with the key levels to define the bias, the risk and the targets both up and down.
This article was written by Greg Michalowski at investinglive.com.