Traders Keeping Their Eye On Gold’s Next Rebound Rally
Traders are thinking are on the lookout for the next rise in gold price. Gold’s low prices came in a trend that it is oh so familiar. It began with a level of resistance when it was at $1,365 an ounce. Then the price began to drop past long-term uptrend line that since December 2016, has been in place.
Currently, the most reliable historical support level is around $1,210. From there, traders will be on the lookout for a rebound. However, if they are looking for a multitude of confirmation signals, they shouldn’t hold their breaths. When gold prices rise, it typically occurs fast with no consolidation activity. Gold trends that investors look for come from rebounds from low numbers. They show the characteristics of a rally that was short lived.
During the rally of December 2016, the price of gold dropped 15 percent in a seven-week period coming in at $1,135. The rebound rally made gold prices jump in 16 weeks time to $1,292. January’s pivot point trend reversal rally was able to move 18 percent, coming in at $1,263 in only six week time.
Traders Are Looking For The Next Pivot Rebound Rally
When trend reversals develop, traders have to move quickly. However, there is one problem when it comes downtrend pivot point reversals. They come out of nowhere! They do not begin from historical point levels thus making it difficult for traders to foresee when and where they will occur.
During a November 2016 rally, the price of gold fell past the support level of $1,210 while on it’s way to $2,135 low.
There are two features to look for when it comes to a pivot point-rebound. The first thing to be on the lookout for is the slowing of downward momentum. Also, looking at previous weekly changes when it comes to gold’s lows and highs for the week.