GOLD turned really bullish during summer this year, surging more than $270 pips higher, as the sentiment in financial markets turned quite negative due to the deteriorating global economy and the escalating trade war between US and China. But, the sentiment started improving in September and Gold reversed lower.
The decline hasn’t been too ferocious, like the surge in Summer, but Gold was making lower highs and lower lows in September, which shows that the pressure turned to the downside. In October though, we have seen Gold trade mostly sideways, which shows uncertainty in the markets.
Gold was finding support at the 200 SMA (purple) on the H4 chart and the range became narrower in the last two weeks, with Gold bouncing between the 200 SMA at the bottom and the 100 SMA (red) at the top. Although, towards the end of last week, Gold climbed higher, breaking the 100 SMA. But, it failed to move past the previous high at $1,518. This level has turned into resistance now and Gold reversed down from there.
Yesterday, the price fell below the 100 SMA, falling into the previous range again and today the price is making another move lower, heading towards the bottom of the range at the 200 SMA. So, now Gold is back inside this range and we will try to trade the range – buying at the bottom and selling at the top.
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