- Gold markets have rallied a bit during the trading session on Thursday, showing signs of life again. It looks like we are trying to trade in a channel, and as we had to the last trading day of the year, it looks like we are going to finish somewhere around the $1815 level.
- I would not expect much during the day, especially once the Europeans go home because then it’s just left to a handful of Americans the throw the market around.
- If you are not in a position at this point, now is not the time to enter.
Underneath, the 50-Day EMA comes into the picture to offer a certain amount of support, and it looks as if we are trying to break above the 200-Day EMA. Once that happens, you have the so-called “golden cross” form, which is a bullish sign for a longer-term type of move, but it’s typically quite late. Nonetheless, there will be algorithms out there that follow right along in a certain amount of the trading public will jump on it.
Noise Ahead
If we were to break down below those moving averages, then it could send the gold market reeling, but I don’t necessarily expect to see that happen. More likely than not, expect to see short-term pullbacks offering buying opportunities that people will be more than willing to take advantage of since should offer a certain amount of “value.” Because of this, I think you’ve got a situation where you remain “buy on the dips”, and do not necessarily try to get to Cuba the market. After all, continues to grind higher so why fight it?
The US dollar and gold can both go higher at the same time, if you doubt me, look at the 1980s. The entire decade saw both be true most of the time. With this, I think you got a situation where you will continue to see a lot of noisy behavior, but ultimately, I think you see a lot of positive behavior before it’s all said and done. I think we will eventually break above the highs of the last couple of weeks, and go looking to the $1875 level given just a little bit of a catalyst or perhaps even just a bit more volume.
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