Gold breaking out higher as forecast in my last analysis and confirmed with volume

daily gold chart

As I suggested in my post of the 26th April, it’s a good news story building for gold and one which was delivered in grand style last week with the precious metal bursting through the $1800 per ounce level as expected and which had been capping progress for some time.

A good news story for the gold bugs

More importantly, the injection of momentum on Wednesday, Thursday, and Friday was associated with excellent and rising volume and confirmed with the VPA stamp of approval that this was a genuine move. As I suggested in April, the move through to $1840 per ounce would be relatively straightforward as there is no price-based resistance and in addition, there is also a low volume node in this area. Now as gold begins to push into the higher volume on the VPOC histogram this is going to prove to be more of a struggle with the peak at $1850 per ounce, before falling away towards the high of the daily chart at $1880 per ounce. So plenty for gold bugs to cheer about, and with the US dollar weakening on truly dire NFP data on Friday and with the soft commodities continuing to rampage higher, inflation is now on the horizon and which is likely to add further momentum to the gold chart. But as always it will be volume which confirms the validity of any move as it did last week.

By Anna Coulling

Charts from NinjaTrader and indicators from Quantum Trading

About Anna 2015 Articles
Hi – my name is Anna Coulling and I am a full time currency, commodities and equities trader. I have been involved in both trading and investing for over fifteen years and have traded many different financial instruments, from options and futures to stocks and commodities. I write and publish articles ( mostly for free ) for UK and international publications on a wide variety of financial issues, and in particular I enjoy helping others learn how to invest and trade.

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