Gold continues to remain rangebound on the daily chart, but it is perhaps the weekly chart which is more revealing, and as I mentioned in my last post, the precious metal remains broadly bullish. Why?
And to answer this we need to consider the construction of the candles of the past few weeks and seek an answer to a simple question. Do these have wicks to the lower or upper bodies? And the answer is to the lower. I have set aside the candle of the start of the year, which saw extreme volatility on risk-on and risk-off flows and which closed with a signal of strong selling. However, this did not follow through and was absorbed the following week. Since then, each move lower has also seen the selling absorbed, and the same was true of last week’s price action, which saw decent buying volume on the reversal lower. From a technical perspective, the levels to watch are the high of the volatility candle at $1620 per ounce for two reasons.
First, it is the high of the extreme of early January, and second, this is where volumes thin out on the volume point of control, opening the way to a move higher longer-term, a view also supported by the trend monitor indicator for Ninjatrader which is still bright blue.
By Anna Coulling
Charts from NinjaTrader and indicators from Quantum Trading
This precious metals has got to be the most rigged game ever, when these bast–ds lose control watch out.