Gold is within sight of 3,500.00 in early trading today. A high around 3,511.00 was hit early this morning and this set off various alarm bells within investment houses operating in the precious metal.
After spending the last handful of months being hypnotically attached to the 3.350.00 levels with many tests of highs and lows, it appears Gold has broken out of its already elevated stupor and has marched to higher ground. As of this writing Gold is near 3,485.00 with fast changes flourishing. The precious metal was able to break above 3,500.00 very early this morning and saw a height near 3,511.00.
On the 22nd of April this year Gold did flirt with the 3,500.00 level. However, since this high from the spring was touched Gold has gravitated within a fairly comfortable trend. The precious metal has certainly maintained a strong stance, but for the past handful of months has been a speculative commodity as support and resistance levels often led back to 3,350.00. This is a caution sign.
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3,500.00 and Targets that Shine for Speculators
The ability of Gold to once again traverse near (and above) 3,500.00 is important. But for speculative bulls and large players of Gold the 3,500.00 will need to be sustained. Yes, long-term investors have different motives and perspectives regarding how they purchase the precious metal. First of all investors are buying Gold as a safe guard against inflation, secondly they are counting on the value of the precious metal to rise over the long haul, they are not concerned by daily or even monthly fluctuations. Simply put, they believe Gold insures their wealth better than fiat currencies.
Day traders tempted to buy Gold at current heights need to consider short and near-term dynamics. Circumstances can change quickly for speculators. Having now traversed 3,500.00 may be a signal that Gold is ready to break free from its sideways price action seen the past few months. However, it must be admitted that Gold has also shown an ability to knock on the door of resistance consistently. Yet, it also has produced reversals lower.
U.S Economic Policy and Fed Policy
Looking for more upside in Gold is tempting, but day traders should not get over confident. Perhaps an aggressive but logical bet will be for Gold to once again track toward the 3,500.00 level in the short-term.
- But for traders without deep pockets, they will have to be conservative and patient and use take profit orders when targets are hit.
- Perhaps aiming for value slightly below 3,500.00 will work.
- But again, reversals lower are a danger.
- If the 4,480.00 is sustained as support this might be an indication that some larger players in Gold believe that speculatively the precious metal will experience another run upwards in the near-term.
Gold Short-Term Outlook:
Current Resistance: 3,490.00
Current Support: 3,475.00
High Target: 3,512.00
Low Target: 3,435.00
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