Gold Markets Technical Analysis
The gold market initially did try to rally a bit during the trading session on Friday, but it turned around and showed signs of hesitation. At this point in time, the market is likely to see a lot of noisy behavior, and the $2,900 level is an area that I think opens up the possibility of a potential floor. If the market were to break down below the hammer from the Wednesday session, then it opens up a pullback to the $2,800 level. I think at this point, you see a market that is a little stretched and probably will have to consolidate a bit in order to build up further pressure.
I’m not somebody who is going to look to short this just because it’s overextended. I think the real play here is to hope for a little bit of a pullback so that you can find value underneath, especially if, or somehow, we get all the way back to the $2,800 level. As things stand right now, though, I just don’t see that happening. And I do think that we either go sideways or we rip to the upside.
I still have a target of $3,000 when it comes to the gold market, and I think we’ll probably get there a lot quicker than we thought. But all things being equal, this is a market that has run pretty far in a short amount of time, so I do think that maybe a little bit of caution here is the way to go. If you already are in a long position for gold, you’re sitting very pretty at this point.
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