Gold Price Outlook – Gold Looks a Bit Tired on Friday

Gold Technical Analysis

Gold markets have rallied a bit during the early hours here on Friday but have given back some of the gains. At this point, we are just so overextended that you just can’t buy this market, not all the way up here. We need a pretty deep correction at this point. The market is getting to the point where we are starting to see lines in places like Australia for people to buy gold. It’s suddenly becoming a conversation with people outside of the financial world.

These are both things that are not good, which tells you you’re getting closer to the top than the bottom. I’m not calling a top here, and I’m certainly not suggesting that you short gold. What I am saying is chasing gold is a very dangerous game indeed. Admittedly, for the last four or five days, I’ve been saying the same thing, and we have raised $300. $300, of course, at this point would have been about 8%. So, there was money to be made.

But all one has to do is look at the history of gold and see just how overdone we are. The gold market doesn’t typically get 8 or 9 % in three days. It’s just not normal behavior. The real question about gold is what it’s trying to tell us. Because there are a lot of different narratives at the same time here, all of which are massive doom narratives, but I don’t know. I think we’re probably, before it’s all said and done, going to see a lot of people hurt in this market. That’s what markets do.

They hurt people over time, as the foolish and, unfortunately, almost always the least able to afford to chase a market and get involved in a bubble tend to do it at the end. Again, we could continue to go higher, but I think a pullback at this point in time is not only a healthy thing. I think it’s a necessary thing. If you are already involved in the gold market and already long, well, there really isn’t a whole lot to do at this point. You just hope it gets to 5,000, I guess. At this point, we’re somewhat in no man’s land.

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