Can Gold Breakout?
Kitco Commentaries | Opinions, Ideas and Markets Talk
Featuring views and opinions written by market professionals, not staff journalists.
After breaking down and trading as low as $1,238, gold has turned around and broken out to the upside closing over $1,330 last week, turning in a dramatic bull run culminating on Friday with a huge up day and 5th week in a row with gains. Can this breakout hold?
As we look at the price action, there is no doubt that this is a breakout. Every attempt to slow gold has been met with buyers. Much like equities, the buying has been constant and relentless, pushing gold as high as $1,345, which is well above the $1,330 breakout area.
We are no longer looking for gold to breakdown and be under pressure, we now will look for levels to buy. We expect a pullback to $1,330 and would look to be buyers at those levels, expecting gold to test the $1,370 level. Much has been attributed to this recent rally, but most signs are pointing to the weakness in the dollar.
The best trade here is to sit back, relax and look for gold to test the $1,330 level before becoming buys. Although our sentiment has changed, we are not going to chase gold higher, but rather wait for it to come back to us and our levels.