The last few days have seen some clear and unequivocal signals from the gold futures chart, that the precious metal is on the way lower, something I have been suggesting for several weeks. As always it is volume that has been sending the loudest and clearest signals of all, with other technical signals playing their part. Tuesday’s price action was classic, with the gold trading session ending with a down candle, but a deep upper wick, as the price action stalled once again at the $1315 per ounce resistance level, clearly defined on the chart. Whilst the upper wick was descriptive enough, the massive volume associated with the price action told its own story. This was confirmed with a further surge on Wednesday, as the final selling was completed by the big money operators, before taking the metal lower in today’s trading session, and through potential support in the $1290 per ounce area.
Below, the $1275 per ounce platform now awaits, and if this is breached as expected, then gold looks set to move deeper still and on towards the low of June in the $1245 per ounce region. A resurgant US dollar is also playing its own part in the bearish sentiment for the precious metal, and with further gains now looking increasingly likely for the currency of first reserve, gold, and silver, look set to plumb new depths in August.
By Anna Coulling