Gold Technical Analysis
The gold market is fairly choppy as it looks like we’re going to form some type of quiet inside day in pre-market trading and once the open outcry session starts, we’ll have to see how things go. But I think a little bit of stagnation makes a certain amount of sense as we are hanging around the $3,800 level. And of course, I have seen gold take off to the upside for three days in a row. So, while I do think that we will go higher overall, a little bit of working off of the froth probably makes some sense here.
Short-term pullbacks should see plenty of support, and I think one of the most likely candidates will be right around the $3,700 level, as it was a bit of a magnet for price for about two weeks. Even if we break down below there, the 50 day EMA is now at $3,542 and rising. So, I think it’s probably only a matter of time before that opens up the possibility of offering dynamic support as well.
I have no interest in shorting gold. I think it’s just far too strong. And as a result, I’d be very hesitant to go in that direction. But having said that, I do recognize that a pullback does make a certain amount of sense. So, I look at that as an opportunity. Based on the ascending triangle, we were going to challenge the $3,800 level and that has been accomplished now. Quite frankly, I don’t know where this ends up, but $4,000 has become a very real possibility.
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