-- Posted Sunday, 1 April 2012 | | Disqus

By Scott Pluschau

Gold had a great breakout from the "Balance Area" with confirming volume last week. I have used on the left hand side below a 1 hour chart instead of the usual 30 minute chart in order to fit in the prior pattern. I was surprised it didn't stick the landing and find support at $1670, but after gold failed to break through the round number at $1,700 the "High Volume Node" at $1650 was still a strong enough magnet for the weakening price action. $1,650 should continue to offer minor support. I touched on this balance area and the high volume node in the 30 minute timeframe in my most recent post on gold here: http://scottpluschau.blogspot.com/2012/03/charts-to-keep-eye-on-this-week-march.html

$1722 is a previous high volume node, and could be a magnet if gold can form another bullish pattern and breakout to the upside again. Unfortunately for the bulls, right now the daily chart is full of noise.

This Friday's legacy COT report in gold put some ice on the recent short term bullishness as the Commercial traders went NET short approximately 19,000 contracts for the reporting period. Perhaps the bulk of that took place in the $1,680-1690's? A breakdown from $1,630 would likely have bearish implications with $1,650 becoming minor resistance. I have a tab at the top of the blog with my interpretations of the COT report.

(On a side note, I am thrilled about a proprietary indicator I have developed in the weekly time frame which covers the net changes in the COT report, the changes to Open Interest, Price and Volume, and the Profile of the Auction for both gold and silver.)

(Click here for an expanded chart)

I do my best to tweet out my post promptly on twitter/ScottPluschau
Consulting? ScottPluschau@gmail.com

-- Posted Sunday, 1 April 2012 | Digg This Article | Source: GoldSeek.com

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