Gold Futures Technical Analysis
The gold market has rallied a bit during the early hours on Monday, as we are now above the crucial $5,000 level. All things being equal, this is a market where I think short-term pullbacks end up offering buying opportunities, especially if we get down toward the $4,800 level.
I don’t have any interest in trying to get too cute here. I think what you’re looking for is a little bit of value that you can take advantage of for a market that turns around to go to the upside. If we break above the $5,100 level, then it opens up the possibility of a move to the $5,400 level.
Central Bank Accumulation and Global Debt
Keep in mind that this is a market that has been very positive for quite some time and there are central banks around the world that continue to accumulate gold. I don’t see any reason to short this market, although I’ll be the first to admit that you don’t necessarily want to jump in and throw a ton of money in this market because you could see a $300 drop and it really wouldn’t change anything.
All things being equal, I believe that this is a market that probably goes looking towards the highs again near the $5,600 level, but it may take some time to get there.
Ultimately, this is a market that I think will continue to attract a lot of interest, not only due to central bank buying but also the massive debt issues around the world and of course central banks around the world looking—quite a few of the major ones at least—of having loose monetary policy.
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