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The intermediate- and long-term technical outlook for gold is positive as the yellow metal attempted to stabilize last week. The weekly on-balance-volume (OBV) made new highs three weeks ago as gold futures made a new closing high. Since gold is now $60 below the highs, the weekly OBV is declining but is still above support. The daily chart for December gold has key support at $1318-$1329, which if broken would allow for a drop to the $1260-$1280 area. The daily OBV is neutral, but will turn negative if the recent lows are violated. If you would like to learn more about gold’s volatility, see this recent Trading Lessons article.
Tom Aspray, professional trader and analyst, serves as video content editor for MoneyShow.com. The views expressed here are his own.
