FX.co ★ XAU/USD, GOLD

The 52-week moving average and the weekly swing chart both show that spot gold is in a downward trend. Nonetheless, traders seem to find the market's retracement zone appealing. The October primary bottom of $3886.46 was just missed by last week's low of $3942.10. Before the surge to the all-time high of $5602.23, this low was the final notable swing low. The formation of a closing price reversal bottom is what makes last week's price movement significant. If verified, this chart pattern may initiate a countertrend rally that lasts two to three weeks, but it does not alter the trend. I'll be keeping an eye out for the 52-week moving average crossover at $4257.63 as confirmation. I believe there will be a strong enough indication that the counter-trend rally is being driven by more than just short-covering if this week's follow-through crosses to the strong side of the 52-week moving average. Additionally, traders should be aware that the buyers entered the market around $4069.54 to $3707.82 when it was challenging a 50% to 61.8% retracement zone. This could indicate that the purchases were made on the basis of value rather than at random. Short-term traders should try to try to try to take advantage. If long-term investors are prepared to wager on a consistent advance to the strong side of the 52-week moving average, they could wish to take advantage of a rally. If the 52-week moving average crossover leads to an upside breakout, then look for the rally to possibly extend to $4481.78. This is the 20% correction line, or the line that changed the bull market into a bear market.