Compression, decrease in volume of any object or substance resulting from applied stress. Compression may be undergone by solids, liquids, and gases and by living systems.

And apparently by gold.

What is the applied stress in gold?

For one, too many bears.

Secondly, a relatively strong dollar.

Third, rising yields, although today yields did soften.

Fourth, a belief in the recent rally in equities abating investors’ fears to a degree.

Yet, even with all that, gold has not sold off.

In fact, the compression is both interesting and prophetic.

Interesting, in that the stories about gold bullion shortages are priced in the market.

Prophetic, in that the price is having a 4th inside week relaying that the hope of a reviving economy is more like wish.

Note the trading ranges of the last four weeks.

Week one had the largest trading range-157.04-163.60.

Week two: 157.80-162.00 or inside week one

Week three: 158.10-162 or inside week one and week two

Week four thus far: 158.89-160.95 or inside week one, two and three.

Compression force is the force generated from compressing an object or substance, which is a common use of physics in powering most hand tools.

Compression force can be visualized by placing an object on a spring. When the spring is compressed and then released, the object is ejected into the air.

Will gold find its compression force to eject the price into the air?

Always best to trade a break from compression in the direction of the phase. Gold is in a bullish phase and remains a leader.

Exactly what we are watching for.

Michele ‘Mish’ Schneider serves as Director of Trading Education at MarketGauge.com. For 20 years, MarketGauge.com has provided financial information and education to thousands. MarketWatch named Mish one of the top 50 financial people to follow on Twitter. In 2018, Mish won the Top Stock Pick of the year for RealVision. Follow her on Twitter at Michele Schneider @marketminute.