Attention on gold

When an instrument has been consolidating for a long period of time we must pay attention to it, due to the fact that at any moment the price may take off in any direction. When there is high volatility in an asset, the best thing to do is to wait for it to calm down. When the market is in a range and it is consolidating, then we must be attentive to a possible breakout and higher momentum in any direction. We may be able to sense when an asset is about to break out, but we don’t know in which direction. On the daily chart of gold we can see that the precious metal has been boxed between the 200 day EMA at the 1270 level and the 1300 level. If we see a rise of volatility close to a support or resistance zone, the commodity may be getting ready to take off.