- Gold remains bullish but choppy as price struggles near $4,400, suggesting a grind higher rather than a breakout.
- Pullbacks toward support are viewed as opportunities, with longer-term upside intact despite near-term hesitation.
The gold market initially tried to rally during the trading session here on Monday, but has struggled to break out above the crucial $4,400 level. I find this interesting because I'm starting to notice a pattern.
Asia and Europe like gold, the Americans may not so much because it seems to turn around when it gets to Wall Street. We are at the top of the channel that we've been in for about four weeks now, and it does look like it is going to be a bit of a hesitant move to the upside. But I don't think this is necessarily the be-all end-all signal to start shorting gold.
Top Forex Brokers
Choppy Action Within a Bullish Trend
I think what this tells us is that it's going to be a grind higher. And why not? This is a market that, quite frankly, got so far ahead of itself, it really needed to be reminded that it can go up and down. For a while there, it looked like it was just going to go parabolic straight up to the moon.
That being said, I do think there are a couple of areas that you need to be watching for potential value. One place that I would love to see offer support is the $4,200 level, because if we can reach there and bounce again, showing momentum to the upside, then I think it offers enough value worth get involved in. The other area of course is $4,400 because it was a swing high, and if we can clear that, it opens up the door to the $4,500 level, followed by $5,000 before it's all said and done.
This is a market that I think remains choppy and noisy, but I do think it remains bullish from a longer-term perspective. So how do you deal with that? You deal with it by using money management. You don't throw your entire portfolio into one trade. You use it as part of a toolbox to gain over time in a market that's obviously bullish. Even if we are struggling to break above that $4,400 level, really, all we would need is some type of fundamental catalyst to get going, and the shorts will get squeezed yet again.
That being said, I like the idea of a pullback. It'll offer cheap gold.
Ready to trade our Gold forecast? We’ve shortlisted the most trusted Gold brokers in the industry for you.