The 30 minute chart for gold makes for interesting reading and reflects the bearish sentiment for gold which remains firmly in place on the slower timeframes of the daily and the weekly charts. Here the price action spans a two day period covering last Friday’s price action and at the start of a new trading week with the Far East and Asia then moving into the European and London session. And once again, a rally higher is snuffed out by the sellers.
If we start with last Friday, the key price action occurred as the US markets opened to the center of the chart, but note the candle and volume of the 15.00 candle. The preceding candle looks fine with volume and price in agreement. In other words a wide spread up candle associated with high volume. Then follows the candle with a deep wick to the upper body and high volume once again. Clearly an anomaly and one which signals heavy selling which is confirmed with the following candle, a weak effort to rally higher on average volume. This candle is then engulfed with a wide spread down candle and triggering a collapse once more.
The key support region at $1219 per ounce was duly breached overnight in Asia and as we move deeper into the London session heavy selling continues with the trend monitor indicator remaining red and only moving into a transitional phase in Asia. The volume point of control is adding further downwards pressure from the $1220 per ounce area, and with low volume nodes now immediately ahead, the short term outlook remains very bearish as does the longer term.
