Gold markets rallied slightly during the week, testing the $1300 level. I think that if we can break above the $1305 region, the market could go higher, perhaps reaching towards the $1320 level. Above there, the market opens towards the $1350 level. Otherwise, if we break down below the uptrend line, we could drift down to the $1275 level, perhaps even lower, and down to the $1240 level. Gold markets are very sensitive to risk appetite around the world, and that of course could come into play at any moment.
With the Americans and the North Koreans getting ready to talk, the reaction could be quite volatile and violent. Overall though, I think it’s only a matter of time before gold find buyers. The question now is whether it happens soon, or if we need to pullback to find even more value. The $1360 level above is massive resistance, and if we can break above there, the market could snap to the upside, not the least of which would be the target of $1400. If we can break above that level, the market could continue to go much higher.
If we did break down from here, I do think that the buyers will come back sooner or later, but it could signify a decent move lower, and I wouldn’t be overly concerned about shorting, but I would necessarily do it from a longer-term perspective. I think that would be a short-term trade.