Gold Markets Weekly Technical Analysis
Gold has rallied during the week as we continue to see the $2,300 level offer support. This is not a huge surprise considering all of the geopolitical issues that are going on right now. And of course, the fact that the $2,300 level has been so important multiple times in the past. With this, I think you’ve got a situation where the market participants are going to continue to go back and forth, looking for some type of reason to break out, and I do think eventually they will find them now. Keep in mind that the market had recently shot straight up in the air, so I suspect most of what we are seeing here has more to do with the idea of simply working off some of the excess froth.
The $2,400 level above should continue to be a bit of a target, and if we can close above there, I suspect that the next time we do, we will continue to go much higher. I do like the idea of owning gold. I think geopolitics alone makes it interesting, but keep in mind that central banks around the world are collecting gold as well, so you have a built-in buyer.
Beyond that, you have profligate borrowing by, well, the United States at a trillion dollars every 90 days. So that of course puts upward pressure on gold. And at this point in time, just simple momentum is in your favor from the longer term standpoint.
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