Gold has spent most of the month of December trying to rally, but also has shown a proclivity to have trouble above the $1800 level. Because of this, I think we may see a little bit of a pullback, especially considering that we just formed a couple of shooting stars on the weekly chart, but I think this is just going to be a nice opportunity to pick up gold in the long term.
- While a lot of people are busy paying attention to the US dollar and how it is behaving as a potential signal, the reality is that the gold and US dollar market can go up at the same time.
- At this juncture, if we break above the top of those couple of shooting stars on the weekly chart, then I do think we could go much higher, with the initial target be in the $1875 level.
- On the other hand, if we break down below the 50-Week EMA, we could send this market down to the $1700 level.
The $1700 level is a large, round, psychologically significant figure and an area where we have seen a lot of support previously. It’s also where the 200-Week EMA sits at, so I think that will probably attract a lot of attention in and of itself. Anything underneath there could open up the market for a move down to the $1625 level where we had seen a lot of support previously.
I think you probably look for bits and pieces of a position on dents, especially if we see some type of balance. Ultimately, I am bullish of gold and I think it probably has a pretty good outlook, especially for people who work going to continue to try to protect wealth. On the other hand, if the interest rate markets go out of kilter, it is possible the gold could get whacked, but I suspect you will probably know about that through the news media or whatever, because all of the sudden everybody will be talking about the bond market. If not, then it’s likely the gold will be a big winner by the end of the month. This is a situation where you are looking for value, and then hopefully taking advantage of it. Be cautious with your position size until we get back to full volume, probably after the Non-Farm Payroll numbers.
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