EDITOR NOTE: If you’re not familiar with chart patterns and technical analysis, there are two “crosses” with which you should at least be familiar: the Death Cross and the Golden Cross. The former is when the average price in the last 50 days has sunk below the average price over the last 200 days. It signals the potential for further sell-offs. The latter is the opposite (50-day average above 200-day average), signaling the potential for bullish momentum. When the price of an asset sinks amid a golden cross pattern, it’s bullish, signaling a discount buying opportunity. That’s what we’re seeing in gold right now. And silver is likely to follow, if not outperform the yellow metal.
Gold futures rose Tuesday, settling near a three-week high amid reports that buying demand for bullion was gathering steam particularly among central banks. A drop in yields for government debt TMUBMUSD10Y, 1.345%, as prices climbed, also was buoying gold contracts. The upward trend for the precious metal, in fact, was sufficient to help it crystalize a longer-term bullish chart pattern known as a golden cross. August gold GC00, 0.06% GCQ21, 0.06% finished up $10.90, or 0.6%, at $1,794.20 an ounce, but had reached as high as $1,815.70 intraday based on the most-active contract. Tuesday's gain was sufficient to propel the precious metal toward a golden cross, which occurs when the 50-day moving average crosses above the 200-DMA, widely viewed as a dividing line between longer-term uptrends and downtrends. The 50-day moving average for gold stood at $1,832.39 an ounce, with the 200-day at $1,832.04, according to FactSet data on Tuesday.
Original post from Market Watch