- The Thursday session has been very good for gold, as it looks like we are doing everything we can to reach toward the 3000 level.
- The 3000 level of course is an area that will attract a lot of attention as it is a large, round, psychologically significant figure, and an area that would probably feature a lot of options trading as well.
- In other words, I think that we are kicking off the next leg higher, which is very interesting when you look at the technical analysis.
Technical Analysis
Despite the fact that I can give you a ton of reasons for gold price to go higher, the reality is that the technical analysis is extraordinarily strong as well. To begin with, we’ve seen a surgeon volume over the last couple of days, and of course the candlestick on Thursday is massive. Because of this, I think that there is a lot of momentum coming into this market, which makes sense considering that we have just broken above the top of a bullish candlestick, and of course a bullish flag.
The bullish flag of course will be something that pretty much everybody in the world is watching, and what I find interesting is that the so-called “measured move” means that we could be going to the $3300 level before it’s all said and done. At this point, I don’t see any reason to short this market, although there is probably going to be a significant amount of profit-taking near the $3000 level.
On any pullback, I anticipate that there will be people looking to get involved and take advantage of “cheap gold” as it appears. I find it difficult to imagine a major selloff in gold unless of course something drastic happens out there that is unforeseen. At this juncture, I would look at the $2900 level as a potential “floor in the market”, which is most certainly something to pay close attention to.
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