All traders understand the significance of price levels, and use any number of methods of trying to establish which are important and which to target not only as potential price objectives, but also try to try and establish where price is likely to stall.
And what makes a price level significant is whether it is reflected across different time frames, and we have a great example from the daily and monthly charts for gold.
On the daily chart we’ve seen some reasonable buying coming in at 1235, and perhaps even the start of a double bottom with the Camarilla marking the upside levels that need to be breached. But the monthly is looking bearish as the gold price is trying to break away from VPOC in the 1260 region, but what is significant this is also the R4 level on the daily and which is where only a break and hold here would signal the resumption of bullish sentiment.
However, short term the metal first needs to move out of the daily buffer zone between the S1 and R1 levels at 1238 and 1244 respectively, and of course further weakness in USD would also help.
By Anna Coulling