- Gold initially shot higher during the trading session on Monday, but then gave back quite a bit of gains.
- I think at this point in time, we're just a little stretched, and what will eventually end up being the case is that you'll be a buyer of dips.
- I like that idea because gold does get a little overdone at times, and I think that's what we saw at the open.
Keep in mind Europe had Easter Monday so a lot of the liquidity may have been out of the market anyway, so that's something to keep in the back of your mind. The $2,200 level underneath I believe ends up being a significant support level as it was previous resistance. However, even if we break down below there, it's not until we break down below the $2,075 level that I begin to worry about the overall trend.
After all, this has been bullish for a long time and for plenty of reasons. Some of those reasons include geopolitics. I mean, quite frankly, it seems like the whole world's on fire, so protecting your wealth with a little bit of gold is not necessarily the worst idea. Furthermore, you have central banks around the world likely to cut rates, and that of course helps gold.
Central banks themselves are buyers of gold, so that means there's a big player out there willing to pick it up. With all that being said, I think it remains a buy on the dip asset probably for the rest of the year. Ultimately, this is a market that I think does go much higher and does eventually have plenty of interest on each dip. The $2,500 level is my longer-term target, but right now, I think we need to relax a bit, find more buyers, and then just ride the wave higher. It is going to be very volatile, but that's absolutely nothing new for the gold market.
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