Can The Bottoms Hold?
Kitco Commentaries | Opinions, Ideas and Markets Talk
Featuring views and opinions written by market professionals, not staff journalists.
Goldâ€™s struggles appear to be over for now. After bottoming on May 21, gold quietly rallied and has built a solid base, clearing the way for higher prices. The rally came from oversold conditions; however, it was not a dead-cat bounce or short-covering rally; it was simply a great technical spot to enter.
This rally is making higher highs and higher lows, which should bring gold to the first resistance of $1,310, which was the level it failed from. We expect a slow grinding rally on volume. The tape action is bullish, volume is building, and the buyers appear to be new money -- all bullish signs.
Although there is still the chance that gold could test the $1,260 level, we feel the bottoms are in and gold should test the $1,365 level. The long-term pattern looks great and the rally is on.