The pattern for gold
Whilst the precious metal continues to deliver intraday trading opportunities, for gold investors and gold bugs, the price action of the last few months has delivered hope and fear in equal measure as the metal has risen strongly suggesting a recovery before hope is once again dashed. This pattern is now becoming the hallmark for gold on the daily chart, as each rally promises much, but delivers little.
The price action from the end of February has been classic, with the high of $1356 per ounce duly capped with a three candle reversal pattern before the price waterfall developed. Gold then found some price-based support in the $1288 per ounce area, before rallying, only for the same pattern to be repeated in late March, and more recently in mid-April. The recovery of the last few days has seen the price of gold trade at $1288.40 per ounce at the time of writing. However, ahead we now have a deep and sustained region of volume based resistance with the volume point of control also adding further bearish pressure at the $1303 per ounce area, and which looks likely to cap any further advance in due course. To the downside, two regions of thin potential price support await in the $1265 and $1268 per ounce regions, but with a low volume node also in close attendance, any move through here opens the way for yet another price waterfall to develop in due course.
For investors, hopes are now pinned on a more consistently weaker USD over the longer term.
By Anna Coulling
Charts from NinjaTrader and indicators from Quantum Trading
Source: https://www.annacoulling.com/commodities/gold-commodities/the-pattern-for-gold/
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