Gold Technical Analysis October 24, 2011

The gold markets rose during the Friday session as traders bought into the “risk on” trade in hopes of a European solution over the weekend. The market still has plenty of bidders, and as such we have been advocating a “buy on the dips” strategy over time. The $1,600 level continues to support this market, and as long as it does, we still buy dips in the gold markets.

The headline risk over the weekend could produce movement in the gold markets, so if you are not in a position at the moment, you may wish to wait until the reaction from the EU meetings fully expresses itself in Asia and Europe before taking on new positions. At this point in time, the trend is still up – so that would be the preferred direction overall.