- Gold remains choppy near the top of a major channel, with hesitation signaling a possible short-term pullback.
- However, the broader uptrend remains intact, and dips are viewed as buying opportunities amid strong central bank demand.
Gold continues to be very noisy. I don't think people know what to do with it right now. We are at the top of a significant channel and perhaps getting ready to break out, but the real barrier isn't necessarily even the channel. I believe it's the $4,400 level. If we can clear that area on a daily close, that probably opens up the next big move higher. And I think that move is going to come sooner or later. That being said, it is worth noting that we've had two shooting stars in a row on the daily chart. And now on Tuesday, it looks like we're going to be very hesitant again.
This tells me there is a very real possibility of a pullback, but that pullback should be thought of as a potential buying opportunity in a strong uptrend. I do believe at this point that the $4,200 level will continue to be important and should offer a certain amount of support. Even if we were to break down below there, then we could go look into the 50-day EMA, where I think there's even more support.
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Support, Pullbacks, and the Bigger Trend
Because of this, I am looking for a short-term pullback that bounces a bit, showing a V pattern on short-term charts that I can take advantage of. I do believe that central banks around the world buying gold continues to be a major tailwind for this market. But let's be honest here, there are a lot of central banks around the world that don't really know what they're doing, except for possibly loosening interest rates. If that's going to be the case, then gold continues to be a winner in 2026, which I do believe will be the case.
For what it's worth, we did roll over into a new contract recently, so maybe that's part of what's going on. But I think the biggest issue that we have is that it's the end of the year. So, I expect choppy, but generally bullish behavior over the next couple of sessions, and look at each dip as an opportunity to pick up a little bit of cheap gold.
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