Gold stays in a tricky spot to start the new month

Gold continues to trade more sideways despite the recent silver fever

Gold D1 02-02
Despite the silver fever – and now cooling of it – in recent days, gold has barely budged for the most part as price action continues to sit in between its key daily moving averages as we now get into February trading.

Gold is down 0.6% today as silver also retreats from the highs yesterday, and is trading back under its key hourly moving averages @ $1,850-55.

That puts sellers in near-term control once again but the daily chart tells a better story of how price action is playing out in gold as of late.

The 200-day moving average (blue line) @ $1,851.95 and key trendline support from the March to December lows @ $1,841.00 currently are still the levels to watch in case sellers try to establish a break to the downside.

Meanwhile, topside momentum continues to be limited by the 100-day moving average (red line) @ $1,877.29 currently and that is keeping gold caught in a bind.

Adding to that is SPDR gold holdings (biggest gold ETF) is cooling down a little after surging last year to its highest levels since 2013:

Gold

That may be an indication of some positioning play to follow that could temper with gold gains despite the more solid fundamentals (slumping real yields, increase in negative yielding debt, Fed put still in play) still in place.

In any case, the technicals will provide confirmation as to which side will take the lead moving forward. But I would argue that there is a firm bias in expecting gold to be bought on dips on any major drop though.