- Gold markets continue to look strong, as we are reaching all-time highs yet again on Monday.
- Gold has broken higher during the early hours on Monday as we continue to see gold go straight up in the air.
- It does make a certain amount of sense that maybe we get an erratic move as we are getting close to the holiday, and volume obviously would be very thin.
- Ultimately, gold is a market that you cannot short right now because, quite frankly, it just refuses to fall for any significant amount of time.
This isn't to say that we won't get the occasional strong pullback, but what we do need to pay the most attention to is being careful when it gets overextended. Right now, I don't think it is, but a short-term pullback would not be the biggest surprise here, and I think ultimately a lot of people would be very interested in buying gold at $4400 if that does in fact happen.
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After that, we have support at $4300, followed by $4200. To the upside, I think we are going to be looking at $4500 pretty quickly, and that is a slightly psychologically important number. But quite frankly, gold has sliced through quite a few psychologically important numbers recently, so there's no real reason to think that it will be any different this time.
Any pullback at this point in time I suspect a lot of people will be willing to chase, and you should keep in mind that gold has quite a few tailwinds at the moment. The first thing, of course, is the fact that the Federal Reserve is starting to change its tone, and that is a major influence on gold as far as them being a little bit more dovish. But you also have to keep in mind that there are a lot of geopolitical concerns, and central banks have been buying gold to protect their balance sheet for some time now; they have been net buyers, and that doesn't look like that's going to change anytime soon.
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