Gold Technical Analysis
The gold market has risen pretty significantly in early Monday trading as we continue to threaten a massive breakout. If we can get above the $4,400 level, it would simply be the next impulsive leg to the upside. We are just a touch extended, so we’ll have to see whether that comes into factor as we move forward. However, even if we do pull back at this point, I think it’s become obvious that the $4,200 level is serving as a bit of a floor in the market.
As long as we can stay above there, I don’t think much changes. You just end up buying gold on dips. In fact, I think you buy gold on dips all the way down to somewhere around $3,950, which we’re nowhere near at the moment. So, this is a strong upward trend, just like it has been for months now.
Key Levels Define the Ongoing Uptrend
We did get a pretty significant pullback, but it looks like the market’s already starting to forget about what happened in late October and now it is ready to really press the issue. Above $4,400, the next thing we see, of course, will be the $4,500 level, and then maybe sometime next year we might be looking at $5,000 an ounce. I think that’s pretty realistic at this point, assuming that we can make a fresh new high.
Again, it’s really not until we break down below the $3,950 level that I even begin to truly worry about the trend. And because of this, I think you have to look at this in a positive light.
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