To say the last few days have been a roller coaster ride for commodities would be an understatement, with both oil and gold providing some sensational trading opportunities, but for very different reasons. For gold, it was the Swiss referendum over the weekend, and for oil, it was the OPEC meeting in Vienna.

If we start with gold (GLD, quote), and the overarching driver here has been the referendum by the Swiss, and the consequent rejection of a return to the gold (IAU, quote) standard for the Swiss franc. Until the last few days, the polls had suggested a close vote, and throughout November speculative positioning ahead of the vote on Sunday saw the price of gold recover from the lows of $1131 per ounce to test the $1205 per ounce area prior to last weekend. However, gold sold off sharply on Friday, as the prospects of a no vote became increasingly likely, with speculators closing out ahead of the decision, and Friday’s price action ended as a wide spread down candle with a lower wick.

However, what was of much greater interest, was not the price action itself, but the associated volume, which whilst above average, was not extreme. The wick to the lower body also hinted at further buying at this level. Yesterday’s price action, then suprised many, with gold soaring higher on the ‘no vote’, and in many ways defying logic. After all, logic would suggest a no vote would see gold prices fall, and a yes vote would see gold prices rise, and rise fast. It is perhaps ironic that had we been living in a world devoid of media and we only had a chart and data feed for company, we would have assumed, incorrectly, the Swiss had voted yes, with yesterday’s candle touching an intraday low of $1141 per ounce and an intraday high of $1221 per ounce before closing at $1207.90 per ounce.

The wide spread up candle created closed well outside the average true range expected for the price of gold on the daily chart, triggering the volatility indicator as a result. However, it is volume once again that reveals the truth behind the price action, and given its extreme nature, volume here should also be at an extreme, and not simply high. Indeed when compared with the previous up candles of November the volume is only marginally higher and is therefore sending a clear and unequivocal signal that the big operators are not joining this move, with the Swiss referendum offering the ideal vehicle for some extreme price manipulation. Once again it is volume that reveals all offering an inside view on the price action. Here it can be seen for what it is – a trap up move set by the insiders – an extreme one perhaps, but an opportunity simply too good to miss.

Moving to oil (USO, quote), and by contrast, the volume price relationship here is agreement, with Friday’s wide spread down candle duly confirmed with ultra high volume, and validating the weight of selling pressure in the market delivered as a result of OPEC’s decision to maintain supply for the time being, and not to cut to provide price support. Whilst the message from the meeting was of a united group, the calls for cuts are growing from some states increasingly concerned at the continuing collapse in the price of oil. However, the driving force here for OPEC is perhaps the growing market share now being taken by shale, and many countries increasingly considering alternative energy sources.

Oil from shale is seen as a viable alternative, and OPEC is playing the longer game here, prepared to take some short term pain for longer term gain. If this is indeed the game plan, then we can expect to see oil prices continue to fall, and this is certainly confirmed by the technical picture with Friday’s break below the the floor of congestion in the $73.50 per barrel area, opening the trap door to a deeper move. Yesterday’s up candle on very high volume simply confirms the weak picture. After all, given the volume we would have expected a much higher move. Furthermore, with sentiment remaining heavily bearish, and driven by OPEC’s desire to drive the alternative energy sources into uneconomic production, we could see oil move through $60 per barrel in the longer term, as the battle for supremacy in the energy sector continues.

Anna Coulling is a trader with over 16 years’ experience and founder of AnnaCoulling.com