Gold’s Buying Climax, and Related Currencies
Since Brexit, gold, silver, and related currencies (comdolls) such as AUD, have been on the rise, due to gold’s status as a safe-haven commodity. Since a few days back however, things have started to change, and big sell orders have started hitting those markets.
In H1, VSA showed a Major Supply signal, which knocked off the market into a sideways range. A few more supply signals have been showing since then. The prices formation, together with the volumes, form a congestion zone, which is the red rectangle (from the soon-to-be-released indicator). These are zones where the price usually stales, and this is a good example. A breakout of the congestion zone to either side will give more indications of what’s to come. I’m more inclined to take a short if the up trendline breaks, as any upside breakout will most likely be short-lived.
Silver has already topped, also on Major Supply, and as of now, the prices have went down a bit too far to go short. In this commodity, more supply or low volume up bars above $20.15 will give another opportunity to go short.
While gold and silver prices were stalling, this pair led the way, and made a serious downturn. It’s now getting near the long-term up trendline, which may provide some short-term support. In this chart it’s also important to note the congestion zone, due to the shake-out a few bars before the start of the rectangle. These are zones where there were previous big buyers in the market, and unless they have sold their positions in the meantime, they will keep buying and support the prices.