Gold Price Forecast – Gold Continues to Work Off Froth

Gold Markets Technical Analysis

Gold markets have pulled back just a bit during the early hours on Monday as we continue to see a lot of noisy and choppy behavior. And I do think that there are plenty of buyers willing to get involved in this market for a multitude of reasons. Some of the reasons that I think gold continues to do quite well include geopolitics. The world is a very messy place at the moment, and I just don’t see that changing anytime soon. Another thing is simply the trend. The trend is very strong. There’s no reason to think it’s suddenly going to change. That’s not how trends work.

Furthermore, you also have to keep in mind that interest rates around the world are dropping and that generally means holding physical gold becomes a little bit more palatable because although you have to pay for storage, it is a safe haven type of asset. And if rates are going to drop, you don’t get that return in the bond market that you might be looking for and then. Finally, several major banks in Asia are out there buying gold and I think that would put a little bit of a floor in the market regardless.

No matter what, I don’t have any interest in shorting gold. And if we do pull back from here a little bit, I would anticipate that somewhere near the $2,600 level, there are probably quite a few buyers waiting. So, with that being said, I do remain positive on gold, but just don’t necessarily think that we’re quite ready to launch yet, as it looks like we’re basically working off some of the froth from the previous shot higher.

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