by Craig Hemke, Sprott Money:
A favorite indicator of technical analysts is the 200-day moving average. Prices above or below this line often reveal the underlying trend. Above, and you’re often in a solid uptrend; below, and you’re in a pullback and consolidation. After a great run, price now stands at a crossroads.
Rather amazingly, COMEX gold futures have closed their 200-day moving average every day since October 17, 2023. Every day for two and a half years! That’s a remarkable stretch that saw price rally from $1900 to $5500. See below:
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Gold – Weekly Nearest Candlestick Chart
For current market pricing, review the gold spot price chart and broader spot price charts.
Gold Price Trends And Moving Average Performance
Along the way, price has followed a pattern of 20% rallies, followed by 3-5 months of consolidation. With each pause, technical analysts claimed that price would need to fall back to its 200-day moving average before moving higher again, and along the way, those analysts were wrong every time. As you can see above, price moved in stages from:
• $2000 to $2400
• $2400 to $2800
• $2800 to $3400
• $3400 to $4300
• $4300 to $5500
Yet each advance came without a back test of the 200-day moving average, which I’ve added as a 40-week moving average below (40 weeks being roughly 200 trading days):
