Gold Price Outlook – Gold Continues to Look Strong

Gold Technical Analysis

Gold markets continued to just go straight up in the air, ignoring gravity, on Thursday, and at this point in time, we are well above the $4200 level. That being said, market participants need to be very cautious. I know I’ve been saying this for a while, but this is a somewhat dangerous move. Really at this point, I think this is a market that is beyond parabolic. And I do think that we need some type of significant support, maybe near the $4,000 level to get people into the market in order to show signs of value and support.

I think if you get that mix and a bounce, then you can get involved to chase it up here. And admittedly, I’ve said this several days in a row, it’s reckless because when something like this stops, it stops abruptly. Longer term, will gold continue to rise? I think so. But I also recognize that the move has been absolutely ridiculously parabolic over the last maybe six weeks or so. And with just a handful of red candlesticks, that tells you just how one-sided this trade is.

These one-sided trades always end the same way, with the poorest traders out there jumping in now, hoping to catch this train, realizing that it’s made most of its move, and then they will have to wear a 500 or $600 pullback, which of course they are levered and get wiped out. There are other markets to make money in and quite frankly, jumping in here right now, I just, I can’t do it. And as a result, you may have to wave goodbye and let it go. We don’t know when it will end, but clearly the volume is starting to pick up again. And then you have to ask yourself, “Can this volume be sustained?”

The answer of course is no. Sooner or later, people run out of money to quit buying gold. I think you’ve got a situation where you desperately need a pullback and that pullback could take several weeks. It could be a move in and of itself. So, I’m very cautious here. If you’re already in gold, that’s a completely different story. There’s nothing on this chart telling you to get out. But clearly, you want to have a place where it does tell you to get out. For me, at the moment, it’s probably all the way down to $4,000.

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