Gold- Way, way too deviated from the MEAN!!!As I’ve mentioned many times in my analyses, my trading approach focuses on identifying the next big move (500 to 1,000 pips) rather than chasing small gains of 30-50 pips, which often feels more like staying busy than truly making money.
In this post, I’ll explain why I believe the next major move in Gold is downward rather than upward.
I’ll take a slightly different approach than usual, focusing on the bigger picture and using a simple 20-period moving average (MA) to smooth price action.
Looking at the posted chart, since the beginning of the recent bull market—highlighted in the chart at the 1,600 zone back in November 2022—Gold has been in a strong uptrend. A key observation is that the 20-period moving average has been forming higher lows.
After the second higher low in October 2023, the trend became even more aggressive, with only two notable higher lows since (looking on MA)—one in July 2024 and another in January 2025.
However, even during these sharp bullish legs, the market has consistently reversed to the mean—with the mean being the 20-period moving average.
At the time of writing, Gold is trading around 3,110, which is significantly deviated from the mean, currently around 2,990.
Conclusion:
Based on this pattern, we could expect either a deep retracement or at least a period of consolidation to allow the moving average time to catch up with the price.
Of course, shorting into such a strong bull run carries high risk, especially without a clear stop-loss level. However, even if Gold spikes to 3,150 or even 3,170, I strongly believe that the price will eventually drop and touch the 20-period moving average.
Disclosure: I am part of Trade Nation's Influencer program and receive a monthly fee for using their TradingView charts in my analyses and educational articles.
