Gold Weekly Technical Analysis
Gold markets have had another very bullish run during the course of the week, breaking above the $1900 level and of course the channel that it had been in. Because of this, it looks like we are entering the impulsive phase of the market, and short-term pullbacks will more likely than not end up being nice buying opportunities. I don’t necessarily have an interest in shorting this market, even though I think we could get a little bit of a pullback.
At this point, anticipate that the market is probably going to go look into the $1950 level, and then eventually the $2000 level. I don’t know whether or not we get there easily, and I definitely think that we are overdue for a little bit of a pullback. That being said, this is a market that continues to be very bullish in general, so I don’t have any interest in trying to get short, at least not anytime soon. With this being the case, I think you’ve got a situation where the market certainly is leaning in one direction, but you don’t necessarily want to chase all the way up here if you can avoid it.
There has been a negative correlation between the US dollar and gold over the longer-term, but recently that correlation has broken down. Gold is going higher as a form of wealth preservation more than anything else, and therefore I’m not so concerned about what’s going on in the Forex markets when it comes to trading gold, at least not right now. I’ll be looking for value, and hopefully finding it over the next several weeks.
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