- Gold has exploded to the upside during trading on Thursday as we continue to see more risk on behavior as the US dollar gets dumped.
- Part of what we are seeing is the reaction to the European Central Bank cutting interest rates rather aggressively and with a statement that suggests that they are going to continue to do so.
- With that being the case, it does make a certain amount of sense that people extrapolate this to the Federal Reserve which of course has an interest rate decision on the 18th.
Short-term pullbacks at this point in time should be buying opportunities and breaking above the $2,530 level was what I was waiting for to see whether or not we could continue the longer term uptrend. The size of the candlestick of course is very bullish, and it looks as if there should be a bit of follow-through at this point. Breaking above the top of the candlestick opens up the possibility of an even bigger move and I do think that happens given enough time, the $2,600 level could very well be targeted.
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Beyond that, I think we could even go as high as $3,000. Let's be honest here, central banks around the world continue to cut rates. There are plenty of geopolitical issues. And of course, central banks around the world are also buying gold, such as the Chinese, Russians, Indians, and several others in that part of the world.
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As long as that's the case, it does make sense that gold continues to rise. And therefore, I have no interest in trying to get short of this market. I think with every dip, you do see a bit of a buying opportunity over the longer term. At this point in time, there’s really nothing out there that would maybe think about shorting gold, as the fundamental reasons all line up for it to go much higher. Even though we could get some type of short-term pullback, and more likely than not only opens more value trading.
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