A very quick update on the weekly chart for gold, as the precious metal has now broken through the psychological $1800 per ounce price point and is now testing the strong price resistance at $1815.
This is marked by the accumulation and distribution indicator (blue hatched line), which we know is strong as the line thickens each time it is tested and holds, so if this is breached, gold moves into a deep congestion area created by the volume point of control which sits at $1840.
From a volume perspective, whilst this week’s price action is yet to be complete, the volume associated with this week’s candle does appear light, and we cannot take last week’s volume for comparison as it was Thanksgiving. However, a weaker US dollar following Jay Powell’s speech, falling bond yields, and rising stock markets have also benefitted the metal, but whether this trifecta of drivers continues, given that interest rates will continue to rise, albeit at a slower pace, remains to be seen.
Finally, the latest WGC (World Gold Council) data reveals that central banks increased their gold buying by 399 tonnes in Q3, a record quarterly amount. Turkey, Uzbekistan, India, and Qatar were the largest known buyers, but a ‘substantial’ quantity was also bought by central banks that did not publicly declare their purchases. The rate at which central banks have accumulated gold reserves this year has not been seen since 1967.