Big Gold Price Moves Come With Big Volume

Pardon me for being Captain Obvious, but gold's big price moves - both up and down - came on big volume.

The volume today isn't much to get excited about.

If you look toward the end of the volume bars at the last ones that rose above the 50-day moving average, you can see a mix of green and red bars.

To me, that looks like either indecision or consolidation. There is a tug of war going on to decide if the gold price will go higher or lower.

Right now, it isn't clear which way the price will go. It has a little ways higher it could run. Perhaps it could make a run at $1,250.00.

The challenge for gold at the moment is that it is trapped in a box. It's going to be difficult for the gold price to move much higher. The price of gold has simply neared extreme levels on  technical basis. That doesn't mean, of course, that the gold price could not push the envelope and move yet higher.

But, the further gold stretches upwards past technical barriers, the more likely it is that, at some point, it will snap back and move towards an extreme technical level. With prices, as in life, you don't get something for nothing. You may be able to stretch the limits, but there is a price to be paid later.

Bottom Line: Gold might be able to stretch its price a bit more but, if it does, it will pay on the downside.