I have read many articles over the last few days discussing increased demand for gold from either central banks or some other end consumer, with the author concluding that higher prices will result at some point in the future. That may be the case, but looking at the price chart of gold suggests an entirely different outcome. The technical setup here suggests gold trades down to about $1590 per ounce.
The rally over the last few days has been on weak volume, and compares to much higher volume levels in the recent downdrafts. This is while the internal technical measures remain weak. I think this suggests that gold is under distribution. However, I would not be surprised if traders push the price of gold up to around $1,670 area to work out of positions before resuming its fall. In any event, don't bite yet.
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