As I’ve said many times before, the longer-term outlook for gold remains bullish, but the road back is proving to be a long and hard one, with several major obstacles in the way on the daily chart. The first of these obstacles is the volume point of control, which is anchored at $1,950 per ounce and shown with the yellow dashed line. This is the first major stopping point in any recovery, but one which has yet to be achieved as the precious metal struggles to break through price-based resistance at $1,920 per ounce, which is proving to be a tough area. It is clearly defined with the red dashed level of the accumulation and distribution indicator. As can be seen, this is a level that has held three times in the past, with the thickness of the line confirming the strength of this area.
Once through here, the volume point of control comes next at $1,950 per ounce, followed shortly thereafter with stronger price based resistance at $1,972 per ounce, a level which is even stronger having been tested on five occasions and is presented by the indicator as a thicker line. It is this area that is perhaps more significant as it is only once this is breached we can expect to see gold regain the $2,000 per ounce level and more in the longer term as volume on the VPOC histogram falls away and so supportive of a fast move higher. But, as always, the development of the trend higher needs to be supported with good volume and to date, we are seeing relatively weak volume when compared to that of July and August.