Gold is down again today, falling more than $21 per ounce or more than 1% as of this writing. The sellers still appear to be in charge and downside volume remains elevated. In addition, the price of the Spider Gold Trust (ticker GLD) touched the upper end of the gap that had opened in mid-August. This is significant to me, as it suggests that traders are testing lower price levels to gauge supply and demand levels.
It also says to me that the gap WILL be filled. I am giving confidence in that call due to the price/volume characteristics in intra-day trading, shown below.
After the immediate downdraft at the open (which by the way will likely be filled. it is a question of when- after gold makes a more sustained price rise following a further decline in the metal or sooner, with the later being a traders jamming the price to get out of positions), the volume has been anemic. The volume has been particularly weak when the GLD bottomed around mid-day. This is just a retracement of the broader move, and is likely sustainable.
After the immediate downdraft at the open (which by the way will likely be filled. it is a question of when- after gold makes a more sustained price rise following a further decline in the metal or sooner, with the later being a traders jamming the price to get out of positions), the volume has been anemic. The volume has been particularly weak when the GLD bottomed around mid-day. This is just a retracement of the broader move, and is likely sustainable.
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