The issue for gold at present is that in the timeframes from the daily to the monthly there is one ever-present technical indicator that continues to signal congestion and that’s the volume point of control which we can see here in play on the weekly chart, but which is equally significant on the other two.
And herein lies the problem for the precious metal. Until we see sustained and rising volume by the big operators buying gold, the price will continue to oscillate around the $1750 per ounce area, whatever may occur in terms of the US dollar or other fundamentals such as inflation.
What is equally concerning on this chart is the decline in volume on any of the up candles of which there are three in recent times. Note the two candle rally of March on declining volume, followed by equally weak volume in April. What is also self-evident from the chart is the density of volume now sitting above on the VPOC histogram to the right of the chart. This effectively extends all the way to $2,000 per ounce and underlines the strength of volume which will be required to drive the price action if this lofty level is to be regained in the longer term. In the meantime and much like oil, we can expect to see further congestion for the precious metal around the $1750 per ounce region for a while.