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What Is the Momentum Indicator

The momentum indicator is today's close divided by the close fourteen days earlier, times a hundred: 100 when the two are equal, above 100 when today's is higher, below when lower. This paper shows you gold's readings of 2025 drawn from real closes — 108.6 at the April high, 98.3 at the low before it — the idea as an elastic band pinned two weeks back and held at today's close, the line under the daily chart, the two closes and one division for a single day, and the dialog on your platform.

Difficulty
Intermediate
Reading time
5 min
Pages
8
Reviewed by
Saman Rahbar

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Today's close against the close two weeks ago

The momentum indicator is a comparison between two closes: today's, and the one fourteen days earlier. Divide the first by the second and multiply by a hundred, and 100 means the close is exactly where it was two weeks ago, above 100 means higher, below 100 lower. On 22 April 2025 gold's reading was 108.6: the close was 8.6 percent above the close of 1 April. On 7 April it was 98.3. Nothing in between the two closes goes into it, which is what makes it the simplest of the oscillators.

An elastic band

The picture is an elastic band. One end is pinned at the close of fourteen days ago; the other is held at today's close. Stretched upward, the band is long and the reading is over 100; stretched downward, under 100; slack and level, the two closes the same, it reads exactly 100. Each day the pin moves forward one day and the held end moves to the new close, so the band is re-stretched daily. Momentum is the stretch, and the stretch is only ever between two closes.

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