Gold Prices April 24, 2013, Technical Analysis

The gold market fell during the session on Tuesday, retesting the $1400 area. This market has made a fairly decent bounce of the last couple of sessions, and we believe that the market is trying to form some type of base in this general vicinity. While the bankers and the like have been trying to crush the value of gold, it has recently started seen massive demand for physical gold. This makes sense of course, as many people out there would love to buy gold on sale.

Goldman Sachs has now issued a statement saying they covered their short position, which originally is what that the market plunging through the $1500 level. Now that they have got themselves out of the marketplace, it’s very likely that we will see a lot of other firms do the same thing. In other words, believe it or not we may be able to see a rally in gold finally.

One of the biggest arguments against gold is the fact that the US dollar is appreciating in value. However, the US dollar doesn’t necessarily have to fall in value in order for gold to go higher. There have been long periods of time where they have moved in opposite directions. With that in mind, it is a bit of an “old wives tale” that the value of the dollar is the most important thing to worry about when it comes gold.

Also, if you have the ability to trade gold and other currencies, by all means do. Without a doubt, if gold starts to pick back up in value, it will be the Japanese Yen the gets absolutely pummeled in terms of gold. If that’s the case, you can see that there will be value in a lot of different markets. However, as most gold is sold in dollar terms, it should be noted that this particular chart does look bullish indeed, and this is especially true as we can get above the $1450 level. It is at that area that we think the market will shoot up another $100 in the short term.