Source: Gold Broker
After posting a solid performance over the summer, gold is on the verge of testing what can be considered major technical resistance around $1378. The precious metal may be about to get its shine back in a big way, as a number of significant technical developments suggest a strong potential for the resumption of the bullish medium- and long-term trend.
RISING VOLUME AND OPEN INTEREST MEANS INCREASING DEMAND
Spurred on by geopolitical tensions in the Korean Peninsula along with lower interest rate expectations in the US and a weaker dollar, trading on COMEX futures reached a record volume of over 6.8 million contracts in August. The uptrend in volume, which interestingly started in December 2015 just as the Fed began its interest rate “lift-off”, is clearly a positive signal for the precious metal given the bullish trend in prices, as demonstrated by past bull markets and as generally accepted by most technical analysts. Notice for instance the uptrend in volume during the major bullish accelerations of 2002 to 2008 and 2009 to 2011, two instances in which gold prices more than doubled.
