Gold Technical Analysis
Gold markets have been pretty active in the early hours here on Monday, gapping lower and then turning around pretty quickly to start rallying again. This is a market that is going to be fueled by the idea that the Federal Reserve is, in fact, ready to start cutting rates. And with that being the case, it does make a certain amount of sense that we would see gold gain due to the fact that the US dollar will probably fall. But we also have other central banks around the world buying gold and potentially cutting rates. So, I think ultimately gold is going to remain strong.
Based on the measured move of the breakout of the ascending triangle that we had been in previously, we should, at least in theory, see gold hit $3,800. I don’t think that’s a wild estimate at this point at all. But that doesn’t mean that it’s tomorrow. And I think that’s the lesson here, that it’s going to be more or less a grind higher, it’s not going to be as impulsive as it has been. But with that being the case, I like the idea of buying pullbacks if and when we get them.
The $3,550 area is an area I’ll be watching closely if we do get back there. But if we just jump higher, which is very possible as well, then I would anticipate that we’ll aim for the $3,700 level in the short term. Regardless, I’ve got no interest whatsoever in shorting gold. It’s just been far too strong as of late. And I don’t want to swim upriver as it were.
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