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(Kitco News) – It’s been a pretty lackluster start to the week as gold is trading around $1925 an ounce. The chart pattern, however, raises many questions about the next possible move for the yellow metal. The pattern remains slightly bearish but the trend is still bullish. On the downside, the two key support areas are marked by the orange ($1919.4/oz) and green ($1881.4/oz) lines. There is also a high volume node of the Volume Profile indicator at $1889.8/oz which could be sticky.
On the upside, the red trend line and red shaded resistance are the two main sticking points. The $1976/oz area could do a head and shoulders (bearish) if the price rejects there, but it remains to be seen if the bulls can lift the price there at this time. Finally, the volume seems very thin as the price drops. This could mean that downside market participation is low. If support levels break, keep an eye on volume as they could be “false exits” on the downside before bulls step in at lower levels.
Warning: The opinions 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 the accuracy of the information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. This is not a solicitation to trade commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article accept no responsibility for loss and/or damage resulting from the use of this publication.