The market fell initially during trading on Thursday as interest rates spiked again, but we are starting to see them calm down and that has given gold a little bit of a reprieve.
Quite frankly, I like the idea of buying the gold market on these dips, and I do think that there's a major floor underneath near the $4,600 level.
As long as the gold price can stay above the $4,600 level, I think there's a real shot at this market continuing to see plenty of buyers underneath to support it. With this, I look at the market through the prism of a potential longer-term uptrend, but I also recognize that as long as there are concerns in the Middle East about the war, the interest rate markets can and probably will be very difficult to deal with.
Volatility and Position Sizing
In this environment, I think you have to just assume that there's going to be almost nonstop volatility, and that is not only a gold thing, but also an entire market thing. That being said, I believe you have a situation where position sizing becomes the most important part of the trading day, and I do recognize that if we continue to get these on-again off-again, negative and then positive headlines, the gold market will probably settle into some type of range.
Top Regulated Brokers
And I think that's really what we're looking at here: $4,600 being the bottom and $4,800 being near the top, maybe $4,900. You're just looking to buy dips for value because fundamentally speaking, longer-term gold should be rather bullish. The problem, of course, is when people panic and they anticipate that the Federal Reserve is going to have to tighten even more based on energy inflation, that drives rates up and it works against gold.
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