Last week was a pivotal one for gold as far as the daily timeframe was concerned and for regular followers of my analysis, you will know the reason why, as it is the $1840 per ounce level that has been patiently waiting for a breach. And in a week that saw gold move higher on five consecutive days, it was Wednesday’s price that finally broke this level, closing the session on a strong move higher with excellent volume. The volatile price action on the day caused a degree of profit-taking with the precious metal first surging to a high of $1870.60 per ounce, before ending at $1848.30, but more importantly above the key resistance level of $1840 per ounce which of course now becomes a solid platform of support in the move higher. The resumption of the longer-term bullish sentiment was further confirmed on both Thursday and Friday as gold closed out the week at $1868.50 per ounce a cause for celebration for ardent gold bugs, with more expected as strongly rising inflation continues to focus the minds of the central banks.
The next question of course is where is gold heading in the longer term? And to answer this we need to turn our attention to a slower timeframe, namely the weekly chart. As we can see last week’s candle ended as a solid up candle with no wicks to either top or bottom on good volume thereby confirming the confidence of this move and highlighting the next key level which is now on the horizon at $1925 per ounce where the metal-topped out in June 2020. This is a not strong level, but one to be aware of as gold heads higher.
Of more significance is the accumulated volume on the VPOC histogram to the right of the chart which presents a dense area of potential resistance from the current price at $1866 per ounce, all the way through to the psychological $2000 per ounce area, and once here falls away dramatically. What this means in simple terms is that for the price to reach this iconic level, the volume associated with the upcoming price action of the next few weeks and months will have to be consistent and strong to provide the necessary momentum for gold to continue its bullish progress. And with inflation fears adding their own unique brand of support, I fully expect the trading year to end on a high point for gold bugs and gold alike.
By Anna Coulling
Charts from NinjaTrader and indicators from Quantum Trading
Brilliant news on gold Anna, I am a follower of precious metals, when the west is drained of gold it will hit the moon, Anna i hope you have not had this spike bioweapon gene therapy they call a Jab, for your sake?
HI Terry – all good here and hope you are well too and gold certainly looks bullish from here on in:-) regards Anna
Excellent post Anna! As always, thank you for these analysis. They are clear and concise. I love them
Hi Esteban – many thanks for your very kind words which are much appreciated – kind regards Anna