Gold markets of course rally during the day, as we have seen more of a “risk on” move, as the US dollar has been falling. This is naturally good for gold, and it looks as if we are ready to go looking towards the $1300 level given enough time. If we pull back from here, I think there is a massive gap at the $1275 level underneath, and of course the fact that the market has been active in this general vicinity.
The gap of course is a very supportive area in and of itself, but we also have several moving averages rallying, and it looks likely that the $1300 level will eventually get broken above, and the market should continue to go much higher. Given enough time, I believe that gold markets finally break out and go much higher, and I am more of a “buy-and-hold” type of traitor, but in the physical sense or at least the non-leveraged sense. The fact that there is a lot of volatility makes the idea of having too much in the way of leverage far too dangerous, so I think that given enough time it’s likely to see both buyers and sellers jumping into the market. Longer-term though, I do think that the US dollar looks vulnerable, and in general gold should rally. By being prudent and more importantly should, you can take advantage of the longer-term proclivity to rally, as we have seen a significant uptrend line hold supportive as well, and therefore we have many different reasons to believe that technically speaking at least, gold looks strong.