Imagine a place where everything you see is made of gold. Solid gold cars. Gold jewelry, even the clothes are made of gold. There is such a place. It's the price range between $1250 and $1260 per ounce of gold.
This is not the magical place as described above, but it does have the allure that draws back gold. The chart below shows that this tight price range has played a role in the path of gold prices 5 times in the past year. First, as support in June and October 2016. Then as resistance in February and March earlier this year. Now, gold is back in that range after a strong move lower Monday. Will it act as support again?
The magnitude of the move coupled with the loss of contact with the 20-day SMA suggest there may be more down side. And after the election in November, gold ignored this range, passing through it like it was a sieve. In early market action Tuesday it is holding as support. Momentum points lower but with the lower Bollinger® Band, a 1241 close by gold may see a bottom very soon. That close to the Golden Zone would generate calls for a bounce and return. Keep an eye on this range.