During the trading hours on Friday, actually even in the pre-market on Twitter, I posted about Gold being at important levels - it was fighting to stay above the MA(50) levels - 108.74. I didn't fancy its odds in winning this crucial battle, so I took a starting position in DZZ - double short Gold ETN. It not only failed to stay away the MA(50), but also dropped below the 50% Fibonacci level, closing at 107.95.
Will it have another crack at MA(50) tomorrow? If yes, keep an eye out on the volume. A weak volume attempt will probably fail, making this a decent entry level for a short position. But wait, things actually get more interesting here....
Gold actually lost this battle with MA(50) on a day when dollar had a relatively big fall down.
As you readers certainly know, gold generally has an inverse relationship with the dollar but even a big move down in the dollar couldn't keep Gold on Friday. Actually, ever since the beginning of this month, both gold and dollar have fallen down together. Interesting, isn't it? Let's see how this plays out. Here's a chart showing the relationship between gold and the dollar.
And speaking of the dollar, it stopped its fall on Friday right at an important support level - 23.4. The MA(50) is also not too far away and should provide further support.
I will be back with a watchlist later tonight. Take care and good luck!
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