Make Kitco Your Homepage

Gold price analysis on the weekly chart

Kitco News

Editor's Note: With so much market volatility, stay on top of daily news! Get caught up in minutes with our speedy summary of today's must-read news and expert opinions. Sign up here!

(Kitco News) -On the weekly chart, it seems easy to see why gold is stuck in a strong consolidation zone. It is best to pick up this timeframe at month-end and as August just closed the downside rejections seem evident. Another key consideration has to be the lack of volume over the last 5-6 weeks there seemed to be no real conviction in any of the downside moves. 

 
Looking closer at the technicals, the green shaded area has supported the bulls and now the price could look to break the grey downward sloping trendline. If this is the case it could be a great indication that the yellow metal could be headed to the red resistance and possibly beyond that, to the high marked in purple. 
 
What is interesting is that the main volume area of this current distribution is at $1730/oz. These high-volume nodes act as a magnet for price and there could be another pullback on the cards. The lower level that should be of concern is the green consolidation low. If that breaks then it would make a lower high lower low chart pattern which Elliott Wave analysts could be interested in. The retracement wave 1-2 did stop at the 61.8% Fibonacci retracement but no lower low has been made. For me, if the $1919/oz wave high is broken that would invalidate any potential wave pattern down and the uptrend could resume. It is fair to say we are still in an uptrend on the weekly chart but in a very stubborn area. 

 

 

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.