At this point, it has become increasingly obvious that gold is in a bullish run, and November has seen more of the same. However, as we enter the month of December, we are at a major resistance barrier that has caused quite a few problems in the past. Because of this, I think you need to pay very close attention to the $2050 level, because if we can close above there, then the gold market can truly take off.
That being said, the market has rallied quite drastically over the last couple of months and could very well need to take a bit of a breather. That would not be out of the realm of normalcy or possibility, so it’s worth noting that a pullback is somewhat likely. Whether or not that sticks remains to be seen, but we have seen this area be very stubborn in the past. However, I can also point out that on the weekly chart, the most recent pullback has been much less drastic than the 3 that preceded it. Because of this, we could be in a situation where we are simply waiting to find out whether or not momentum can enter the market.
Selling Gold is Difficult at This Point
- Recently, we have seen the bond markets have a major influence on where we are going, and I do think at this point higher interest rates will continue to be something that we need to pay close attention to.
- If interest rates in America start to rise again, that will be bad for the gold market.
- On the other hand, we also have geopolitical issues around the world that can continue to keep the gold market somewhat buoyed, with the idea being that people are out there looking to protect their wealth. Recession could also come into play here as well.
Regardless, I think it is going to be difficult to sell gold at this point, and I would anticipate that pullback should see significant port near the crucial $2000 level. That pullback should be thought of as a potential buying opportunity, but caution is something that you need to keep in the back of your mind, due to the fact that as we head toward Christmas, liquidity will become rather thin, and cold markets could become somewhat erratic. While I favor the upside, I also recognize you need to find value.
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