The gold price trades below 50-day MA for the first time since June. The chart shows that gold is now trading above the $1350 range. A strong gold trade is likely in the near term. In the medium term, traders will likely watch this as a strong support level as the price retrains from the recent downward trend and starts moving upward.
As I wrote previously, there are many reasons why the gold price trades below 50-day MA. I am going to quickly discuss three of these here.
One, gold is trading below MA as the global economy weakens. This weakness can be seen in the weakening of US Dollar, which is the main global currency. If the global economy continues to weaken, then the US Dollar will likely weaken as well.
Two, gold has been experiencing oversold conditions which are a result of supply and demand. As mentioned earlier, the global supply has been relatively stable, while demand is increasing.
Three, gold price retrains from the recent downward trend and starts moving upward again. This is a clear signal for investors to enter the market and get into this rally as long as it remains within the bullish region.
These are three reasons that the gold price trades below 50-day MA for the first time in months. There are still strong bullish signals and resistance levels that the price will hold at until the end of the year.
So, if you have been holding out for a rebound in the price because you believe that the bearish signals and support are holding and the price retrains, you will continue to do so for some time until the end of the year. After the end of the year, the market will start to move back to the mean and you will be able to exit the market if you are correct.
If you want to make money trading, especially short term, you need to keep an eye on the gold price trades. and do not wait until the market has moved off the current range. Once the market has moved off the current range and back to the mean, you will be better off to exit the market as the price will probably move back to the mean in the next few weeks.
When the market is going back to the mean it is because the trend is changing and the market has found the right time to move in the direction you want. When the price retrains, it is usually because the trend has reversed and it is the right time to jump on board.
If you buy gold during these times when the price retrains, you can take advantage and make money on the move. Many people who trade with a swing trading strategy buy and sell as soon as the price retrains, which creates a big profit.
Technical traders who trade with a technical analysis based strategy will find the trend reversals by following certain patterns that they can identify by using a set of indicators. These patterns are called support and resistance levels and they are a good indicator of when the price is about to reverse.
Technical traders can look for them on their charts by looking at the MACD (Moving Average Convergence Divergence) or MACD (Mixed). An average of the MACD values can tell you when the trend reverses.
If you follow the price reversals on a chart, you can identify the support and resistance levels by looking at the MACD values. You can then look for an upward or downward break from these support or resistance levels and determine if this is a buying opportunity.
If you buy gold when the price retrains and watch the trend reverse, you will be taking advantage of this in order to buy low and sell high. when the price reverses and retrains.
This type of strategy is used by experienced traders who trade for a living and can make money trading gold on the day when the market retrains. on the move.