Key level for the bulls and bears
The price of gold has been a clear beneficiary from geopolitical risk aversion trades. Technically, at the end of December the price moved above its 100 day moving average (blue line) and that gave the precious metal a boost.
The price is also able to extend above the 2019 highs at the $1555.07 to $1557.11 range.
Today, the price extended up to the $1611.42 level after the retaliatory bombing by Iran. However, as the dust settled traders started to view the action as good enough for now (and perhaps over). Pres. Trump's address to the nation also lessened the geopolitical fears and ignite a risk on move.
As a result, the price has dipped down to a low price of $1552.82. That did take the price back below the August and September highs, but momentum could not be maintained. There seems to be some dip buying against the level as a hedge (we really don't know what Iran's response will be to the President's comments).
Going forward however, if the price can move back below those old highs, I would expect selling to intensify with traders potentially looking back toward the $1500 level where the 100 day moving average is moving towards.
So a key level is being tested in gold. Buyers and sellers are both interested in seeing which way the next tilt will be.
Does the price stay with more of a bullish bias by holding support against the August/September swing highs, or does the support give way and the price rotate back down toward the key 100 day moving average level.
