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Over the last few days, we have seen the congestion phase for gold reinforced further by the arrival of the volume point of control in the $1200 per ounce region, which has served to reinforce the current daily picture for the precious metal as it continues to trade in a narrow channel of price action. Gold, for the time being has reached a point of price agreement at this key psychological level, and as volumes continues to build in this region, so the more important it becomes, with associated price resistance building overhead in the $1220 per ounce area and denoted by the blue dotted line, and equally below in the $1195 per ounce area.

What is perhaps most worrying for the precious metal is that even the recent weakness in the US dollar has done little to help propel gold away from this price area, with each daily effort to rise failing to find a follow through in consecutive sessions, and falling back once again as the sellers move in. For the longer term, the yellow dashed line of the volume point of control is now pivotal, and with a sustained volume profile now extending from the current trading price of $1205.3 per ounce through to $1240 per ounce, the daily chart now mirrors the longer term bearish outlook, and with low volume nodes below, increasingly any breakaway, when it comes seems likely to be to the downside.