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The gold markets fell initially during the Wednesday session, but managed to bounce in order to form a hammer just above the $1600 level. This area has acted as support lately, and we do have a series of higher lows in this marketplace. This of course shows a bearish inclination of trading, and it should also be noted that we are currently walking along the uptrend line of the most recent six months or so.
This market is appealing to many people out there, but the thing is the demand can be fleeting. It is because of this and the nature of the gold market as being so flaky that we are waiting to see a breakout above the $1640 level. It is at that point in time that we are more than willing to not only go long, but hold onto the positions as long as we continue the upward momentum. Our first target would be $1700, with $1800 expected shortly thereafter. As for selling, we do not do it until we get well below the $1500 level.