- The gold market initially tried to rally a bit during the course of the trading session on Tuesday but gave back gains rather significantly to show hesitation.
- However, late in the day, it does look like we are trying to do everything we can to turn the market around and rally.
- Because of this, I suspect that there are plenty of buyers on dips and it is probably only a matter of time before we get back to the upside and try to go looking at the $3,500 level.
The $3,500 level is a large round psychologically significant figure and an area that previously had been massive resistance and basically the all-time high.
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So, with that being said, I think we're in a situation here where traders are looking to sort out whether or not we can get back to the upside. But I also recognize that there are a lot of different things going on around the world right now that could cause some headaches and therefore, I would expect more volatility.
I like buying dips. I don't have any interest in shorting gold. I think right now we are basically in the middle of the $3,200 to the $3,500 ring. And therefore, we are just trying to do what we can to make things consolidate, work off some of the previous froth, and then eventually take off to the upside and go looking towards the $3,800 level based on the measured move.
If we were to break down below the $3,200 level, we might have to reset closer to the $3,000 level, but as things stand right now, I think that's very unlikely. Ultimately, this is a bullish market for the longer term. I have no interest in shorting gold anytime soon.
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