Buyers making a play on a sharp correction higher.
The price of gold is rebounding strongly today with a gain of $33 or 1496% of $1760.58. The there reached its lowest level since June 2020 yesterday $1676.89. The low moved below the 61.8% retracement of the move up from the March 2020 low at $1689.89, but stalled ahead of the swing low from June 2020 at $1670.98.
Drilling to the hourly chart below, the price bounce has now moved back above its 100 hour moving average (blue line currently at $1701.58). The price tested that moving average line and found support buyers after the break, and moved back up toward its 200 hour moving average target (green line) currently at $1722.63. The high price so far has reached $1720.61. A move above that moving average would open the door for a test of a 38.2% retracement of the move down from the February 23 swing high. That level comes in at $1730.04.
The buyers are in play with the move above the 100 hour MA, but there is work to be done. Getting back above the 200 hour moving average – and staying above – is step one. Step 2 is to get back above the 38.2% retracement at $1730.04. If the sellers lean against the 200 hour MA instead, and the 100 hour MA is rebroken, all bets of a bottom in place is off.