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Does Anyone Want To Buy Gold Right Now?

ByAnna Coulling
Published 06/24/2013, 12:22 AM
Updated 07/09/2023, 06:31 AM

Nobody wants gold – well not at this price anyway, and given the current technical picture, gold seems to have lost its appeal, both as a safe haven asset and as a hedge against inflation. It's something the gold bugs will not want to hear, but hear it they must, as gold seems set to fall significantly, now that the floor of potential support in the $1340 per ounce area has finally been breached.

Those of you who are regular readers will know I have been talking about this level for some time. Indeed, I suggested several weeks ago that if this level were broken then gold would suffer a structural collapse, which duly arrived on Thursday last week, with the wide-spread down candle, plunging gold through the $1300 per ounce level. This breakout from the sideways price congestion of the last few weeks was associated on the daily chart with above average volume, a strong confirming signal of a valid move, so anyone living in hope that this was a fakeout will be sadly disappointed.

To add further to this gloomy picture for gold bulls, the volume at price histogram displays this deep congestion area graphically at the left of the chart, with an ultra high volume band extending from $1340 through to $1380 per ounce. Any recovery through here in the next few months will need to see the price action coupled with high and rising volumes. But that’s a long way off.
Chart1
In the short term, expect further bearish momentum and should this develop on rising volume, then gold may test the $1240 per ounce level, followed by a deeper move towards the $1220 per ounce area.

As we can see from the weekly chart, there is a deep area of potential price support here, but should this fail to hold, then $1075 per ounce becomes a real possibility in the long term.

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Latest comments

Hi Anna,. Please write on next position for gold. You were true gold broke 1220 and went to 1180.Thanks for your help.
Paper Gold what a contradiction in terms. Talk about virtual reality
Couldn't agree more!
HI Guys - thanks for your comments - always much appreciated. Price almost at 1220 which may provide interim support. However, on monthly chart gold may look to re-test 1050 per ounce.. Yes, ve3tru - market is highly manipulated (but then so are the others!). The time may be coming when physical market will determine gold price - not futures, so moving into the metal itself makes good sense.
Thanks for the comments guys - always much appreciated. Price almost at 1220 where it is likely to pause but given its current strong downside momentum we could even see it move to re-test 1050 per ounce. . Yes, ve3tru - gold market is highly manipulated (like all the others). We may also see price of gold determined by physical & not futures so moving into the metal itself makes much more sense.
What nonsense, oversupply less favorable, no one wants it, there are now waiting periods to get any, I'm waiting a month now. Places like India are doing everything they can, taxes import quotas to stop people from buying it. Germany was told wait 10 years before they can get theirs back. What's happening is, they are dumping paper gold as its backed by nothing, and going physical, especially after the bail-ins where the bank or government will just take it. Since gold is priced with paper gold, that no one wants, its going down in price. Whats worse is the whole system is fixed and corrupted to the max.. I agree that the price will continue to go down, as they dump more paper. Even I have some I'm dumping this week and converting it to the real stuff.
Great call Anna,. . Do you still see @1,220 as short term support?
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