- The gold market has rallied again during the trading session on Monday, as traders continue to pile into the gold market.
- Gold has shown quite a bit of strength over the last several months, and I just don’t see this changing anytime soon.
- Any time we get a bit of a pullback, I’m looking to buy gold “on the cheap”, as we clearly are in a very strong uptrend.
Previous Targets
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It’s worth noting that every previous target that we have had has been hit. The most obvious one was a massive ascending triangle that suggested that the market was going to reach the $3800 level, and we have course have broken well above there. Because of this, then we start to look at the next obvious targets, and you can make an argument for a small bullish flag that we broke out of on Monday that would anticipate a move to the $3915 region. I think we’re going to get there rather rapidly at this rate. Gold is most certainly “melting up”, which can be a very dangerous state of affairs, because we could see a significant pullback sooner or later. That pullback should end up being a buying opportunity though, and I also recognize that the $3700 level is a massive support level.
On the other hand, there could be a psychological target in the form of the $3900 level, and most certainly in the form of the $4000 level, which of course will bring in a lot of headlines. Market participants love headlines, and therefore if we can get to the $4000 level, then it makes a lot of sense that we would see traders pay close attention to that, because it will be all over the headlines and of course terminals around the world. I would anticipate that any pullback at this point in time will have people looking to buy “cheap gold”, which has been the case for months. We are most certainly in a bullish phase of gold, but I also recognize that gold has a habit of stopping and going sideways for the purpose of working off the excess froth, and we will probably have to do that in the next few days.
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