- During the trading session on Friday, we saw the gold market reach the crucial $3000 level, which is a large, round, psychologically important figure that will continue to attract a lot of attention.
- We have also seen a pushback in this area, as you would anticipate, due to profit-taking and I would assume a bit of options trading.
Technical Analysis
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Looking at the technical analysis, it’s pretty clear that gold is still very strong and ultimately, I think that buyers will continue to be attracted to this market as the geopolitical issues out there and of course the concerns about various tariff wars continue to be in the forefront of traders’ minds. All things being equal, this is a market that I think will probably have to pull back a bit from this big figure, but I would assume that it will only attract more buyers, those who are looking to get involved in a market that is obviously bullish and may have missed this push higher over the last couple of days.
We have just broken out above the top of a bullish flag, which measures for a potential move to the $3300 level, but I don’t think we get there overnight. I think it’s going to be a bit of a fight to get above the crucial $3000 level, but when I look at this chart, I don’t see any reason why it will happen eventually. I just think that there will be a lot of questions asked in this area, which is typical for these major milestone levels.
I believe there is a significant amount of support underneath, especially near the $2900 level, but we are nowhere near testing that, and I suspect that any pullback that we get from this level will probably be bought much quicker than that level as value hunters will probably be very aggressive in what’s been the most obvious bullish market.
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