Open Interest and Volume are both rising together on the daily chart in Gold, which historically has been healthy for a continuation in the trend. See right hand side 6 month daily chart below. I don’t have any near term resistance other than the round number 1,800.

The 30 minute chart, see left hand side below had two 30 minute bars with approximately 50,000 contracts traded in the past six trading days.

Open Interest increased in Gold futures 5,594 contracts yesterday, so this rally is not primarily “short covering”. You cannot have an increase in short covering with open interest rising. New shorts on a NET basis are being placed, with new longs, and this is more firework potential in a rising trend. See right hand side chart below. (I have a tab at the top of the blog with my interpretations of Open Interest.)

The bears that are holding leveraged short positions are in a really bad spot here on the chart.

“Hoping” for manipulation, is not a good strategy if you are not “in the know”. Those who trade with leverage and “hope” a short trade comes back, ignore chart signals, or use poor risk management a majority of the time send their trading account to the financial “graveyard”.

Some consolidation for a few days would be optimal in my opinion.

Join the brand new premium service of Scott Pluschau with trade alert service and “swing/position” model portfolio, which is based on the unique trading methodology. More info on the premium service page or send an e-mail to ScottPluschau@gmail.com

Source - http://goldsilverworlds.com/gold-silver-price-news/chart-of-the-day-on-september-14th-gold/

© 2012 Copyright goldsilverworlds - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

Only logged in users are allowed to post comments. Register/ Log in

The Market Oracle is a FREE Financial Markets Forecasting & Analysis web-site.
(c) 2005-2024 MarketOracle.co.uk (Market Oracle Ltd) - Market Oracle Ltd asserts copyright on all articles authored by our editorial team and all comments posted. Any and all information provided within the web-site, is for general information purposes only and Market Oracle Ltd do not warrant the accuracy, timeliness or suitability of any information provided on this site. nor is or shall be deemed to constitute, financial or any other advice or recommendation by us. and are also not meant to be investment advice or solicitation or recommendation to establish market positions. We do not give investment advice and our comments are an expression of opinion only and should not be construed in any manner whatsoever as recommendations to enter into a market position either stock, option, futures contract, bonds, commodity or any other financial instrument at any time. We recommend that independent professional advice is obtained before you make any investment or trading decisions. By using this site you agree to this sites Terms of Use. From time to time we promote or endorse certain products / services that we believe are worthy of your time and attention. In return for that endorsement and only in the cases where you purchase directly though us may we be compensated by the producers of those products.