Gold markets rose a bit during the Thursday session, but not nearly as much as they had recently. The market has enjoyed a roughly $60 surge over the last three trading sessions, and looks as if it is ready to continue the massive uptrend that it has been in since the year 2001.
The market is being buoyed by many different factors at the moment. The world's central banks are net buyers of gold, and as a result there will be bidding under most circumstances by them. The natural disposition of the market will be positive as a result of their presence, and traders would be wise not to try and trade against these massive accounts.
The trading action on Thursday was a bit subdued, but when you look at how far the market had come in such a short amount of time, perhaps a rest was sorely needed. The candle for the session looks a bit like a doji, and as it is just under the $1,800 level, a pullback is a very real possibility at this point.
If we get the pullback that this chart seems to be hinting at, we can only look at it as a buying opportunity as most dips have been over the last decade or so. The $1,800 level will of course be somewhat resistive as a large round number, but the fact is that we have been higher than $1,800 in the past, and that does wear away some of the concern about being so high in value to a lot of traders.
The trade going forward can only be a buy or be flat type of mentality as the world continues to print currency, and this will continue to push demand for gold and other hard assets. This is our main thesis, so we are not willing to sell because of it. The recently conquered $1,750 level should now act as support, and $1,700 will certainly be so. The market could pull back, but we are willing to buy those dips on the very first signs of support going forward.
Gold Forecast February 24, 2012, Technical Analysis
Gold Pivot Points (Time Frame: 1 Day)
Name S3 S2 S1 Pivot R1 R2 R3