Gold Breaking Out Higher
Anna Coulling | May 10, 2021 03:48PM ET
As I suggested in my post of April 26, a good news story is building for gold. That outcome was delivered in grand style last week, with the precious metal bursting through the $1,800-per-ounce level as expected.
More importantly, the injection of momentum on Wednesday, Thursday and Friday was associated with excellent rising volume and confirmed with the VPA stamp of approval that this was a genuine move. As I suggested in April, the move through to $1,840 per ounce was relatively straightforward as there was no price-based resistance. In addition, there is a low volume node in this area.
Now, as gold begins to push into the higher volume on the VPOC histogram this is going to prove to be more of a struggle, with the peak at $1,850 per ounce, before falling away towards the high of the daily chart at $1,880 per ounce. So there is plenty for gold bugs to cheer about. And with the U.S. dollar weakening on truly dire NFP data on Friday and with the soft commodities continuing to rampage higher, inflation is now on the horizon. This is likely to add further momentum to the gold chart. But as always, it will be volume that confirms the validity of any move – as it did last week.
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