Strong upside gains in the dollar index added pressure to the precious metals market today, with the exception of platinum. Currently the dollar index is up .53% (+0.503 points), and fixed at 96.275.

Market technicians use a multitude of moving averages in terms of’ the time cycles. These can vary from extremely short averages of three, seven or 10 minutes in length. Daily moving averages analyze long-term cycles and look at market momentum in terms of the big picture and long sustained moves.

Considering the recent rally in gold pricing which in essentially began in the middle of November when pricing was about $1200 per ounce, and its recent surge to $1300. This most recent decline can be put in the context of either a simple shallow retracement, or the beginning of a much deeper correction.

Most major markets are closed today in honor of Martin Luther King Jr. day here in the United States. Both the bond markets as well as U.S stocks are closed today as they observe the holiday.

This week’s failure to close above $1300, is most likely signaling a conclusion to the current rally, and the beginning of a correction.

The chart below (figure 1) has an area highlighted in yellow, identifying a compressing range which has been the predominant characteristic since the beginning of this year.

Both gold and silver are trading modestly lower on the day, and platinum and palladium are trading higher. As of 4:20 PM Eastern standard time February gold Comex futures are trading off by $2.70 (-0.21%), and fixed at $1291.10. Silver futures are also trading lower on the day. The most active March contract is currently fixed at $15.55, with a net decline of almost 9 cents on the day.

The entire precious metals complex is trading higher on the day. Gold futures are currently up $4.90 (+0,37%), and fixed at $1293.20. After trading to a high today of $1295.40, gold softened a little bit, closing about two dollars off the intraday high, also trading to a low of $1287.60.

Gold continues to trade in a narrow and defined range with dollar strength or weakness defining the majority of the net price change on any given day.

Although gold is trading well off of its intraday high, the sun colored metal was able to hold onto fractional gains throughout the trading session. As of 4:30 PM Eastern standard time gold futures, basis the February 2019 Comex contract is trading up by $2.20 (+0.16%) and fixed at $1291.60.

Although gains for this week in gold pricing were fractional, nonetheless it closed above its open on Monday. This creates a green candlestick on a weekly chart, and now for the fourth consecutive week we have seen gold close with weekly gains. The last time this occurred was in mid-November up until the first week of December.