Thursday's Market Minute: Gold Slumps, But Still Within Trading Range

Gold futures fell almost -3% within the span of two days last week, with this week bringing modest improvement. Major moving averages, which have been clustered together and trending sideways since early June as price chopped around, are starting to spread apart to the downside; the 21-day, 63-day & 252-day Exponential Moving Averages are now all sloping downward, which typically would be viewed as bearish.

The /GC contract’s advance during last week halted cold at the 252-EMA and the subsequent plunge took price to a close below the lower Bollinger Band (another development often interpreted as bearish) as the bands themselves continue to widen to reflect rising volatility. The area near 1675 has been a floor for prices three times so far during 2021, while more recently the zone between 1830 & 1835 has been a stopping point for prices three times since July. Another technical observation is gold futures have seen little support during the past year until the RSI crossed below the oversold level, so beware of trying to “catch the falling knife” if we see more selling action.

Image by PublicDomainPictures from Pixabay