Gold pares weekly advance as buyers lose some near-term momentum

With the drop today, gold is down 0.1% on the week and looks to end its latest weekly winning streak at two. There’s still US trading to follow later though but there are a couple of things to note with the latest decline here. On the daily chart, it might not seem like much:

That as price action continues to hold above the $2,700 mark and not really threatening a test of the figure level yet. But when you switch over to the near-term chart, there is a notable development amid the push and pull this week:

The drop today sees price action fall back below its 100-hour moving average (red line). And that puts the near-term bias in gold to being more neutral now. The 200-hour moving average (blue line) now returns to focus as a key near-term support as such. And that level is seen at around $2,707 currently.

With little else happening in broader markets today, some tentative signs of exhaustion in gold is perhaps something to keep an eye out for. As mentioned earlier in the week:

“At this point, it seems to be a case of it (a squeeze) will come when it comes. As stated earlier this month, I’m running out of reasons for one presently.

The case for gold to move higher has been clear and concise since the end of last year. And that has continued well into this year as well, as seen here.

All that being said, this may arguably be the trickiest time period for gold as we approach year-end. The December and January seasonal rush is one that typically benefits gold considerably during the turn of the year. So, if there’s ever a time for profit taking, this may be the stretch to watch out for.

Otherwise, it can be tough to challenge the gold narrative in the next few months.”

This article was written by Justin Low at www.forexlive.com.