Gold markets rallied significantly during the day on Friday, reaching towards the $1325 level. This is an area that has been massive resistance recently, but the fact that we are closing out the day towards the top of the range is a good sign. Keep in mind that there is a massive amount of resistance extending above the $1325 level and towards the $1350 level. This is an area that should continue to be difficult to break above, but the Friday session is a good sign.
The Federal Reserve continues to have a bit of a dovish stance, and as long as that’s going to be the case I think we will see gold go much higher. Overall, I think that the market will continue to grind to the upside, and I think that short-term pullbacks should continue to be buying opportunities, as the $1300 level should be pretty significant support. Below there, I think there is also supported down at the $1275 level as well. With that being the case, I think that it’s only a matter time before the buyers return. I like buying the dips, and I do think that eventually we will break out to the upside. This is probably going to take quite some time to get through that area, but if we did, that would be an extraordinarily bullish sign.
Looking at this chart, it’s obvious that we are in an uptrend line, and I think that given enough time it’s likely that we will continue to see plenty of interest. Pay attention to the US dollar, because if it continues to fall as it did late on Friday, that should send this market much higher, but it’s obviously going to take a lot of effort. I have no interest in selling Gold as long as we are above the $1275 handle.
