Gold Closing 2020 at the Important 100 SMA Level
Safe havens started the year on a bullish footing and they picked up further pace in Q1, as the coronavirus broke out, first in China and then in Europe. The bullish momentum continued in Q2 as well, as the world economy went through a flash recession due to the lock-downs during March and April.
The bullish momentum continued until the first week of August, but as the global economy was rebounding, the sentiment improved, sending safe havens lower. As a result, GOLD reversed down and retreated lower until the end of November.
The descending trend line is also adding to the resistance
During the uptrend, moving averages were providing support on the daily chart, pushing gold higher. Now, they are working as support again, although instead of pushing higher, they are holding the price on pullbacks and stalling the decline for a while.
The 50 SMA (yellow) was holding as support during August, and when that moving average was broken, the 100 SMA (green) took its turn. The 100 SMA was broken when the news of the coronavirus vaccine came out after US presidential elections, although the 200 SMA (purple) came into play again, after providing support during the big crash in March.
The price bounced off that moving average, and after providing resistance for some time, the 50 SMA was broken to the upside. But, the 100 SMA has turned into resistance now. This moving average has been providing resistance for the last two weeks, and Gold is closing 2020 right at this moving average, at $ 1,895.
The descending trend line comes right there as well, so this is an important level. If gold fails here, we might see some bearish momentum at the beginning of 2021, and if buyers push above this level, the larger bullish trend might some into play again.
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