Yesterday was a positive one for gold which saw the precious metal climb throughout the day before closing the session at $1794.7 per ounce having opened at $1760.40 per ounce, and delivering some much-needed positive impetus for gold bugs. In terms of the price action itself, the candle closed on a wide spread body with minor wicks top and bottom, and more importantly on high volume. Therefore, effort and result are in agreement here if we consider some of the benchmark candles from last month and in particular that from the 30th September, thereby confirming the genuine nature of the move and the question now is where next for the price of gold? A question that is easy to answer from a technical perspective.
First, and immediately ahead is the volume point of control denoted with the yellow dashed line at $1810 per ounce and as such is likely to be the first stopping point in any continuation of the current move higher. Once the vpoc is achieved we can expect to see congestion develop at this level and one which could extend for some time given the extent of volume on the VPOC histogram. However, this is not the most significant level on the daily chart. That particular honor falls at $1840 per ounce. This level is pivotal and in my opinion, will define the longer-term price action as it one which has seen three previous bullish moves fail in the last few months. If it is breached in due course and is what I expect to see with rapidly rising inflation driving investors back into the precious metal, then gold will be set for a longer-term bullish trend through $1920 per ounce and on towards a test of the all-time high. But patience will be required. First, we have to break free from the VPOC on good volume, followed by a breach of $1840 per ounce.
By Anna Coulling – charts from NinjaTrader and indicators from Quantum Trading
You really help in understanding this market of forex.. 4sure I never knew what was driving this market right now I know I shall be good.
Great and good to hear Bob – many thanks – Anna