Gold markets are behaving very much like stock markets, in the sense that they are simply grinding higher, and are not giving much in the way of an entry possibility for those of us who did not jump on it right away. That there’s a candlestick does look a little uglier than the previous several, so we may be during a pullback.
This pullback should end up being a nice buying opportunity, and I have quite a bit of interest near the $1900 level, right along with the $1880 level. The $1880 level is an area that’s been important a couple of times as far as both support and resistance, and therefore I think you got a situation where you have to look at this through the prism of finding value because quite frankly the gold markets have been on fire. Furthermore, I think a lot of this comes down to wealth preservation, and of course, the fact that interest rates have dropped a bit.
Waiting for the Federal Reserve
- That being said, the middle of next week features the Federal Reserve interest rate decision and the statement afterward, so we will have to pay special attention to both.
- If the Federal Reserve remains very hawkish and Jerome Powell goes into the press conference and warns everybody that he’s going to do everything he can to slow the economy down, it may have the effect of not only driving the dollar higher, but we may see gold be used as wealth preservation even more so.
That being said, if that situation does arise, it’s very likely that we could see a little bit of a pullback initially, which I plan on jumping all over. We would need to see the US dollar take off like a rocket to really bring down gold, and I think it’s probably only a matter of time before we get to the $2000 level anyway. That’s an area that was important multiple times in the past and was where we started selling off last year. Because of this, I think there’s a lot of trouble just waiting in that area, but I certainly will be paying close attention to see if we can get above it. If we do break above that, gold will really shine at that point.
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