- Gold rallied rather significantly during the trading session on Friday again, as it looks like we are trying to get to the $2,400 level.
- The $2,400 level is a large round in the psychologically significant figure.
- It is an area that a lot of people are watching as a potential top of the overall consolidation area.
Short-term pullbacks I think continue to attract a lot of buyers, and with that being the case, I am waiting for any drop as an opportunity to pick up more gold. If we can break above the $2,450 level, then it's possible that the gold market could really start to take off and continue to show the next leg higher.
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On a Pullback…
If we pull back from here, the $2,325 level is where the 50 day EMA sits. I think at this point in time, that would be your short term floor. After that, you have the idea of $2,300 offering support that more or less being a range that goes down to the $2,280 level. We have been working on trying to expend a lot of energy to work off the froth from the shot higher and at this point I think we are getting close to a continuation rally.
Keep in mind that the summer is somewhat illiquid at times and that might be causing some of the malaise, but it is more likely than not that we eventually break out to the upside and resolve for a move to at least $2,500 and quite frankly I think a lot higher than that. It would not surprise me to see gold hit 3000 sometime in the next year. But in the meantime, it is going to be a situation where you're just buying dips as they bounce again. That point, it makes a lot of sense that value hunters continue to drive this market higher.
Also, I believe that once the summer is over, this is a market that should really start to take off. The Federal Reserve will continue to see a lot of influence in this market, and once they start to cut, this is a situation where the market will launch.
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