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Where Next For Gold?

By Anna CoullingCommoditiesNov 30, 2021 03:13PM ET
www.investing.com/analysis/where-next-for-gold-200610005
Where Next For Gold?
By Anna Coulling   |  Nov 30, 2021 03:13PM ET
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Gold Daily Chart.
Gold Daily Chart.

Following last week’s volatility, which spanned the markets with the sell-everything mentality, it's time to check in on gold. In particular, let's look at the daily chart to get a handle on where the precious metal is heading longer term.

If we step back for a moment and consider the price action from a volume perspective, it was the price action of the Nov. 10 that was not a good omen despite the breach of the significant resistance level at $1,840 per ounce. This was the level we have been waiting on for some time. The candle closed with a deep wick to the upper body on high volume and an ominous portent of things to come. The wick signalled a resistance to higher prices and selling by the big operators into weakness. While the metal did manage to continue higher for a couple of days thereafter, touching a high of $1,882 per ounce on Nov. 16th, this was to be the zenith for gold, with the price action closing on the day with further weakness and a second deep wicked candle. The price waterfall duly developed from the Nov. 18 on widening spreads and rising volume, before the metal arrived back at the volume point of control at $1,795 per ounce and some much-needed respite. For gold bugs, this should offer a cushion to further falls, also confirmed by the dramatic decline in volume under the down candles of the last few days, suggesting selling pressure has wained.

In the short term, we can expect to see a further period of congestion around the $1,800 per ounce area, supported by the strong platform of price-based support below and denoted with the blue dashed line of the accumulation and distribution indicator at $1,780 per ounce. So two strong platforms of support in place with the VPOC and the ACD indicator. So what are we looking at in terms of a bullish recovery? The short answer is a trend higher, which is more considered and less volatile on steadily rising volume, which was not what we witnessed last time.

The barriers ahead are at $1,811 per ounce with the red dashed line, which is a well-developed region, but once past $1,820 per ounce we move into a low-volume region on the VPOC histogram, which increases from $1,850 per ounce to $1,870 per ounce before falling again. But in general, it's not a deep area, so a positive outlook longer term. Short term, congestion is expected. Medium term, a recovery and retest of the $1,840-per-ounce area, assuming volume is supportive.

Where Next For Gold?
 

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Where Next For Gold?

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Comments (4)
armin jafarzaei
armin jafarzaei Nov 30, 2021 9:06PM ET
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One person dead of omicron virus in iran becarefull freinds rhis variant is vwry dangerous
michele stalla
Blue Nov 30, 2021 9:06PM ET
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and how many people have died of smoking in Iran today?
Edward Chong
Edward Chong Nov 30, 2021 9:06PM ET
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i dont think people care about iran at all.
Homero Siqueira
Homero Siqueira Nov 30, 2021 8:48PM ET
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Hello everybody, Please, i´d like to know what we can do about clear manipulation over the gold market. As you can see right now, between 7pm ( Nov 29) to 1am(Nov 30) ( UTC time ) the clear manipulation, i am sure that some institution doing that including right now as well. What the human being is capable to do for make more money, .... Homero ( Financial Specialist ).
MuraliKrishna Brahmandam
MuraliKrishna Brahmandam Nov 30, 2021 4:14PM ET
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gold has to go up from here. gold is just waiting for Dr Jerome Bubble to deliver big lumpy chunky droppings in stocks needed for gold to go up. Dr Jerome Bubble has been somewhat constipated for a long time. he will get cured soon. gold will go up
saifee rehman
saifee rehman Nov 30, 2021 3:33PM ET
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