Gold markets went sideways during early trading on Monday, as the market appears to be in a bit of a holding pattern. Ultimately, I think that it’s only a matter of time before the buyers get involved though, especially considering that the US dollar has been struggling as of late. The $1350 level has been important more than once, and in both directions. Ultimately, I think that if we break to the upside, it’s likely that we will go looking towards the $1400 level, an area that I think is very significant longer-term.
When we break above the $1400 level, I think that will bring in a fresh flood of buyers. If we pull back from here in the meantime, I believe that $1325 level underneath will be a bit of a floor, so even if we do pull back from here it’s likely that there should be plenty of support to be found. I look at pullbacks and gold as potential value, and I believe that we will eventually make that previously mentioned breakout. The longer-term outlook for gold is positive, as the US dollar continues to struggle with the selling off bond markets in America, so I believe that it’s only a matter of time before the US dollar turns around and falls apart, giving us a reason to start buying gold as it tends to move in the other direction. I believe that the US dollar will struggle the rest of the year, and that of course sends gold higher.