- Gold initially rallied during the trading session on Monday, but then gave back the gains to show signs of hesitation.
- At this point, I think the market just got a little further out over its skis than it should have.
- Now we've got a little bit of profit taking going on.
- Short-term pullbacks will almost certainly offer a lot of value that people will be looking to take advantage of.
For that matter, the $2,675 level should be a bit of support, which is also a resistance. If we can break above the highs of the day on Monday, then I think that just means that we go even further to the upside. Either way, I think this is a scenario where traders are going to be looking at this through the prism of trying to find cheap ounces of gold.
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There are a lot of reasons to go higher eventually
Market participants continue to find plenty of reasons for gold to go higher, not the least of which, of course, would be lower interest rates. If central banks around the world continue to cut rates, then it makes sense that gold will continue to perform fairly well. However, there's also the geopolitical component that continues to drive people into this market as well. Beyond that, the technical analysis screams bullish behavior. The fact that we are giving up some of the gains on Monday, quite frankly, I think will just end up being a buying opportunity before it's all said and done.
There's literally nothing on this chart that even remotely suggests that we are going to see anything more than just a short-term pullback. That's healthy in a market that has been so strong. I think it is only a matter of time before the buyers reappear, and take advantage of any opportunity that they get in this asset.
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