Gold markets initially went sideways during the trading session on Thursday, but then broke down below the $1320 level as the US dollar started to strengthen. I believe that the market will probably go looking towards lower levels, perhaps the $1300 level, which of course has a certain amount of psychological support attached to it. I think that the previous reactions to that level should continue to drive this market. I expect some type of bounce, and the closer we get to the $1300 level, I’m very likely to put money to work. Alternately, if we break above the $1325 level, I’m very likely to start buying again. I believe that eventually we could go to the $1350 level, and then the $1400 level after that. I like the idea of buying gold in bits and pieces but recognize that you will need to be cautious and keep a small position going and only add when the trade works out in your favor. If we can finally break above the $1400 level, then I think we go much higher in more of a “buy-and-hold” situation.
If we were to break down below the $1300 level, it’s likely that the market would unwind rather drastically. I believe that we are trying to find a reason to go higher, but the interest rates in America rising of course has put a lot of difficulty in this market. I believe there’s not geopolitical risk out there to continue to put some money into gold though.