RE:RE:RE:TIMING ... Gold Markets Technical Analysis
The gold market initially did rally during the trading session on Friday, but it looks like the $2,175 level is starting to cause a little bit of a headache for traders, and I think that might end up being the main story here. After all, we have a situation where gold has gotten a little stretched. So, a little bit of a pullback wouldn’t necessarily be the biggest surprise. Ultimately though, I think you’ve got to look at this through the prism of a market that once it does pull back, you have to be thinking of it as a buying opportunity.
After all gold has been strong for quite some time and there are a lot of fundamental reasons to think that continues. That’s not to say that we can’t pull back towards the $2,075 level, an area that was previous resistance. And I think a lot of people would be very interested in buying due to the fact that there’s a lot of market memory there. That being said, be cautious. I wouldn’t get overly exposed at this point, but I’m certainly not looking to short gold anytime soon. With that, I am just waiting for the pullback to bounce in and then to get involved. If we can break above the recent highs, that would also be a very strong sign, obviously.
And at that point in time, I think you have to look at it through the prism of a market that will eventually go looking maybe as high as $2,500. That’s obviously a longer term projection, but it is something that could happen. So with that, I like the idea of owning gold. I don’t want to short the gold market regardless, even if you told me we were going to pull back, I wouldn’t be inclined to do so. Now it just comes down to whether or not we go sideways and work off some of the excess froth or if we pull back and try to find and create more value.