Hi all, don't look at Gold charts very often but this one looks...

Hi all, don't look at Gold charts very often but this one looks interesting for next week. Below is a chart with some explanations for anyone interested.

I'm looking at the consolidation period since early August which has formed a cup and handle type of pattern and a successful test of the key level of around 80c. This is the background to the current price action and to me suggests a bias to the upside for future movements. This week will be interesting because there appears to be a bit of supply to work through (mainly in the 0.82 to 0.895 area) before price is ready to make the next strong move. Demand has so far been willing to absorb supply at this level and formed a pennant consolidation pattern while volatility contracts in to some sideways movement.

There may be some more work to do clearing out supply, but a quick move down to test the 80c level again should be met with demand and just below is the demand zone from the previous consolidation period. Anyway, a quick move down like this would put it below the lower Bollinger Band and straight into oversold territory and a potential v shaped bounce as a response. The contraction in volatility we see forming at the moment often precedes a sharp break up or down and suggests there may be not long left before it happens.

And as I mentioned earlier I think the odds favour a break to the up side, so looking forward to seeing how it plays out this week! Good luck everyone.