- Gold dropped rather quickly during the trading session on Monday, as it looks like the chaos in the silver market is starting to influence what is going on over here as well.
Gold
The $4400 level is an area that I think a lot of people will be watching very closely, as it was previous resistance, and of course, it is a large, round, psychologically significant figure. So, I think you have a scenario where we might get a little bit of a buying opportunity. That being said, as I look at the gold charts currently, they look very negative, and therefore, I think it gives us a little bit of a pause to wait for some type of opportunity to get long again.
A drop from here, even if it is below the $4300 level, I think, is going to be an opportunity to get long, and I will be looking for a bounce that I can take advantage of on the right-hand side of the V pattern. I have no interest in shorting gold, and I do think that central banks around the world will continue to accumulate it.
Central Bank Policy
Of course, the loose monetary policy that is almost certainly coming will continue to drive gold to the upside. The central banks around the world continue to hoard it, and of course, there are plenty of geopolitical issues. If we are, in fact, going to see a little bit of economic pain out there, it does make a certain amount of sense that gold is hoarded.
Top Regulated Brokers
This is especially true considering the massive amounts of debt that we currently have, and therefore, I am very bullish on gold, but this pullback has been long overdue. It does make sense that maybe we get a bit of a pullback heading into the New Year holiday because, quite frankly, the volume will not be there for most participants to really push this market to the upside.
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