- Gold continues to rally during the early hours here on Monday. As it looks at this point time, we're going to do everything we can to get to the $4,000 level. The last couple of months have been extraordinarily bullish, and we've barely had a pullback. Keep in mind that we had initially broken above a significant ascending triangle in the beginning of September and it's basically been straight up in the air since then.
- The $4,000 level will of course offer a certain amount of psychological resistance but there's nothing particularly special about it. One would think that there's a lot of options barriers there so it's not a huge surprise to see that we're struggling to just simply slice through it. We gave back some of the games early in the day.
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But even at this point, I still think you have a situation where every time gold pulls back, you have to be looking at it through the prism of buying it at lower levels. Central banks around the world continue to hoard gold and we have plenty of geopolitical issues out there to continue to drive it up as well. With the central banks around the world cutting rates, especially the Federal Reserve, which has a positive effect on gold over the longer term. That being said, the $3,800 level, which was the measured move of that ascending triangle that we broke out of early September, could offer support as far as market memory is concerned on the way back down. We are stretched. I really don't like buying gold all the way up here, but full disclosure, I could have told you that two weeks ago. So sooner or later, we will run out of momentum, but right now, it doesn't look like it. Again, I think this is a buy on the dip market, and eventually we will not only test the $4,000 level, but we'll probably break through it.
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