Since its April plunge gold has had an uncanny attraction to a particular price level:

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Gold_Daily_10.31.2013

Since the April 15th plunge in gold, the gold price has touched the $1321 level on 35 different trading days. The $1321 level is significant for a number of reasons:

  • It was the April 16th crash low
  • It is the 38.2% Fibonacci retracement level of the entire April-June sell-off
  • It is the 38.2% Fibonacci retracement level of the August-October decline

Gold_1321_Fib

  • It is the highest volume by price level of the year
  • It is almost the exact midpoint of the 2008 low and 2011 high (depending whether or not you use closing prices it is between $1314 and $1318)

Price has a way of gravitating to important levels which carry extra weight for a multitude of reasons. The sheer amount of confluence at $1321, both Fibonacci and otherwise, has made it a magnet for price. There is no telling when this will end, but it is definitely something to remain mindful of.