Gold rallies on the dollars decline and moves back above $1300
Trades at the highest level since September 26th
The dollar has been moving lower and gold has been reacting. In fact since bottoming on December 12 at $1236.55, the precious metal has moved up on 11 of the last 13 trading days, including the last 7 days.
The move to the upside, has taken the price back above the 200 day MA (currently at $1270.82) and the 100 day MA (at $1287.34). That is a risk level for longs now. The bias is more bullish.
Today, the price cracked the 50% of the move down from the 2017 high at $1297.08, the $1300 level and the high from October 16 at $1306.11.
The high price today traded up to $1307.66. We currently trade back below the October high but above the natural level at $1300 and the 50% level. Those levels are also support levels now.
The move higher has turned the bias higher. There is no denying that. Can the momentum continue in the new trading year? Much will depend on the dollar. If it continues to go lower, the precious metal can go higher. If the dollar reverses back higher, the technicals will suffer as well. There will be a move back below the $1300 and $1297 levels. If the 100 day MA is also breached, the rally will be nothing but a year end phenomena.