- The gold market has been all over the place during the trading session here on Thursday as we are starting to struggle with the idea of the $3,900 level.
- Ultimately, I think this is a situation where if we do get a pullback, that's a good thing.
- The market has been so strong for so long now that I think you have to look at this through the prism of a market that just quite frankly is on fire, and it looks like it's doing everything it can to get to the $4,000 level.
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Pullbacks are Good for Gold
I do think the pullbacks make a lot of sense and I do like buying them. The $3,800 level is an area that I'm very interested in myself, as the ascending triangle had a measured move to the $3,800 level that we did in fact break above. By breaking above there, it suggests to me at least that the market is going to remain bullish for quite some time, but I also recognize that there's probably a bit of market memory in that area. Anything below there doesn't necessarily mean that I would get bearish on this market, just that I might be a little bit more selective.
To the upside, the $4,000 level is the obvious target and I do think that given enough time, we will reach that level. The Federal Reserve is likely to cut rates a couple of times between now and summer, but that may not even be the big driver. I think a lot of concerns about global economic instability is a major problem. So, with this, I'm bullish on gold. I would like to see a little bit more of a pullback and try to buy it cheaply. At this point, it is all but impossible to get short of gold, so a little bit of patience will more likely than not pay off.
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