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The gold markets had a fairly quiet session during the Thursday trading day, but did manage to slice out minor gains. We are currently hovering around the $1620 level, and as such we think that the bullish traders are out there trying to build a momentum. The lows are getting higher, and a serious attack on the $1640 level seems to be in the works.
It is above that level that we begin to buy gold wholeheartedly. We can see some noise above, but we figure that the $1700 level is well within the sights of buyers at this point in time. If we can get above the $1700 level, we think that the $1800 level is next. We are only buying gold if forced into a trade, at least until we can close on the daily chart below the $1500 level where we think the trend changes.
With all of the major central banks out there looking to ease their monetary policies, it's hard to think that the gold markets will get a boost sooner or later. We know that the Federal Reserve is contemplating it, we also know that the European Central Bank almost has to do it, and while the Bank of England has recently claimed that it doesn't need to - there are many factors in the United Kingdom that seem to suggest otherwise. And as usual, the Bank of Japan is in a super easing policy.
When you add all this up, you see devaluing Fiat currencies everywhere. In times like this, people like to own hard assets as a way to protect their wealth. Gold is by far one of the favored markets for that type of trade, and there is nothing in the marketplace right now this suggests that this is going to change.
On a daily close above the $1640 level, we are more than willing to not only buy gold, but to buy and hold it. We suspect that the $1800 level will eventually be attempted, but we just don't know how long it will take. Unlike many of the analysis that we do, we tend to look at gold as an investment and not a trade.