From the 1168 close, gold trades in a 1056.34 – 1371.38 range. The wide variation derives from gold’s location as current prices trade between the 10 and 15 year averages. Neither average is overbought nor oversold. The dichotomy reveals 1056 is an uptrend in progress, while the downtrend from 1.1371 is underway. Gold’s larger range is found between the 5 and 10 year averages between 1056.34 – 1721.34.
Gold’s current price is below every average from 1- 10 years. The 2, 5 and 6 year averages drive gold’s price, particularly the 5 year due to its distance from current price. On price drops, the 5 year average becomes more oversold.
The 3 year average at 1587.42 is severely misaligned among all averages. It aligns more closely with the 7 year average at 1592.51 rather than the 5 year at 1721.34. More importantly, the 3 year average reveals a significant peak is here and a peak at richter scale levels.
The 5 year average is most oversold vs its counterparts, but its price at 1721 is located between the 3 year at 1587 and 6 year at 1673.26, arguably misaligned as well, but its responsible as the short term trade signal until resolution occurs between the 1056 and 1371 range. A price break of 1371 encounters stiff resistance from 1 and 2 year averages at 1422.89, 1482.83 then 1587.42, 1592.51, 1673.26 and the 5 year at 1721.
To align the distribution from 1 – 15 years, current targets must be seen at 1373.86, 1393.43, 1407.62, 1422.40, 1476.78, 1592.51, 1626.91, 1673.26 and 938.16. Targets will adjust slightly as a more orderly distribution aligns itself. Targets reveal at this juncture, gold is heading higher over time.
What is expected is continued ranges between 1056.34 – 1371.38. A break of 1056 only sees next 1005.10 and severely oversold vs the 5 year average. Extreme sell points above are found at 1275.37 and 1256.77 and buy points at 1005.10 and 1005.80. If 1005.10 breaks later, then 987.64 is next target.
Neither average from 1 -15 years, however, are sufficiently overbought or oversold, although oversold is approaching on further price drops. Overbought begins from 1236 and extremes at 1275 and reveal ranges won’t nor are yet ready to break.