Another Nightmare for Gold Bugs!
As US markets returned to work yesterday after the long Labor day weekend, and an even longer summer, trading for gold started with a bang.
Gold
Bearish sentiment for gold accelerates with volume leading the way
The last few days have seen some clear and unequivocal signals from the gold futures chart, that the precious metal is on the way lower, something I have been suggesting for several weeks.
Gold Remains Heavily Bearish On The Daily Chart
Gold futures sold off sharply once again yesterday, with the precious metal plunging through the $1300 per ounce level, to close the trading session for the December contract with a wide spread down candle shedding $14 per ounce on the day.
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Where gold goes – silver follows!
The plunge in gold prices yesterday, rocked the markets with the precious metal shedding over $30 per ounce in the futures market as the big operators finally triggered the move in a classic pump and dump operation.
Gold breaks out of key congestion as fear takes hold!
In the past couple of days we have seen extreme and unusual price activity in the December gold futures contract with yesterday’s volume exceeding that of Tuesday’s by some distance, but without the requisite move higher.
Gold looks like a trap up move!
As another trading month comes to an end, gold traders will be watching wondering and waiting as the precious metal is once again poised delicately at a tipping point on the daily chart.
Commodities (oil) reflect the global tensions
In any escalation of political tension oil and gold are the two key commodities to watch. For oil the breakout and surge higher was largely driven by events in Iraq coupled with supply issues at Cushing, both of which combined to help power the WTI crude oil (USO, quote) contract up to the $107 per barrel price point as evidenced by last Thursday’s wide spread up candle.
Gold recovers, but the rally looks weak
On the daily gold chart we are at an interesting phase of price action. The weakness in the price of gold has been clearly evidenced since mid March, with each rally higher petering out. This was then followed by an extended phase of price congestion which saw the precious metal oscillate between $1315 per ounce to the upside and $1280 to the downside.