Gold Ready to Explode to the Downside, as the Range Between MAs Narrows
Gold has been bouncing between 2 MAs, which are squeezing it between them
Traditional safe haven assets, such as precious metals like gold and silver, have been bearish since August, when they reversed down as the sentiment started to improve due to the global economic rebound after the reopening. But the surge in cryptocurrencies also played a role, as they stole the safe haven status from gold and silver.
Gold was trading in a downward trend until the end of November, when we saw a bounce off the 200 SMA (purple) on the H4 chart, after the USD turned bearish again, following the US presidential elections. The 200 SMA has turned into a solid support indicator since then.
The price moved above the 100 SMA (green) in the first week of January, but then went back down again, as the selloff resumed. Now, gold is trading between these two MAs, and the range is getting narrower. Today gold is heading down, so it looks like the 200 SMA will be broken soon, as the USD gains some momentum.
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