The Golden Zone

• Posted by Greg Harmon
• on May 2nd, 2017

Imagine a place where everything you see is made of Gold. Solid Gold cars. Gold jewelry, even Gold clothes. It would be hard to leave such a place. Even if you are not a Gold lover, the sheer magnitude of it would force you to linger, to look a bit closer at all the different things made of Gold. And if you left you would remember it and go back if it was nearby or at least go back in your memory. There is such a place. It is the price range between $1250 and $1260 per ounce of Gold.

This is not a magical place like I described above, but it does have that allure that draws Gold back. The chart below shows that this tight price range has played a role in the path of Gold prices 5 times in the past year. First as support in June and October 2016. Then as resistance in February and March earlier this year. Now Gold is back in that range after a strong move lower Monday. Will it act as support again?

The magnitude of the move coupled with the loss of contact with the 20 day SMA suggest there may be more down side. And after the election in November Gold ignored this range, passing through it like it was a sieve. In early market action Tuesday it is holding as support. Momentum points lower but with the lower Bollinger Band a 1241 close by Gold may see a bottom very soon. That close to the Golden Zone would generate calls for a bounce and return. Keep an eye on this range.

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The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

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