Gold markets fell a bit during the week, slicing through the $1275 level. We reached down towards the $1260 level, but did find a little bit of support towards the end of the Friday session, as we were testing the bottom of the hammer from a couple of weeks previously. If we can break above the top of the weekly candle, then I think the market may try to revisit the $1300 level above. The $1250 level underneath should be supportive, and I think that the level is considered to be very supportive and essentially “fair value” from longer-term traders. Recently, we had broken out of the pink rectangle that I have on the chart, so I suspect that the buyers are probably going to be a bit more aggressive, but is not until we break above the $1310 level that I think they will start to throw a lot of money into the market.
Geopolitical concerns continue, so that of course could put a bit of a bid into the gold market, but ultimately the US dollar strengthening has been a major driver of what happens in this market, sending gold too much lower levels. I think if we break down below the $1250 level, that would be a bit of a “washout” in the overall attitude an uptrend, and I think at that point we would probably drop rather significantly, perhaps down to the $1200 level at the least. Longer-term, I believe the gold will rally, but I’m speaking in years, not necessarily weeks. Because of this, I think it is going to be very volatile, and probably easier to trade off of shorter-term charts, being able to pay attention to the various levels I have mentioned previously.