Gold – 21 Oct

Gold closed up Friday and once again found resistance at the 18 day moving average. Resistance is this moving average near 1650 followed by chart resistance at at 1681. Support remains the 1604 area being bolstered by the Bollinger band. The big thing that jumps out is how constricted the Bollinger bands have become. This tells us that volatility is very diminished, and as is the case for very wide volatility and extremely expanded bands, it is a condition that cannot last. A break in low volatility is coming that will give way to higher volatility and expanding bands. Both the short term and intermediate trend is down with the intermediate trend channel shown. Look for volume to confirm a break higher to give validity to a reversal. If volume is low and we dribble across the trend line laterally, more consolidation is likely with sideways action. Possible divergence may be forming in all 3 technical studies, where slope of the magenta technical study and price trend lines do not agree, and we will need to see what Monday brings before anything definitive can be determined in that department.

The wider angle view:

And the weekly chart:

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