Gold markets rose again on Thursday as traders continue to sell not only the Dollar, but a lot of other paper assets as well. This will always give a boost to the gold markets as it is considered as a hard currency for such situations. With the ongoing crisis in Europe, there will continue to be a lack of confidence in paper currencies in the European area, and with the Federal Reserve promising ultra low interest rates for the next two years, the trading world will continue to be a bit hesitant to buy the Dollar as well. Because of this, gold will continue to get a boost.

The breaking of the $1,700 level was significant, and the fact it was done on the fly as the market simply popped right thought shows just how interested traders are in owning gold. When everyone wants it - it is easy to make money in that market. It is obvious that the price of gold will continue to rise over time; however it isn't always easy to get a decent entry. By paying attention to a few areas on the chart, you should be able to enter with a reasonable stop and size to your trade.

The first area that looks interesting to us for buying gold is the $1,700 area. After all, the area was never fully tested as it just shot through it. Markets love to go back and revisit levels, so this wouldn't be a surprise to me on some kind of pullback. The $1,650 area would also be of interest, but we feel that the area probably won't be retested yet again as the $1,700 round number is still waiting.

We are ready to enter on supportive candles at those areas, and if the market continues to run to the upside - we would be forced to buy at the break of the top of Thursday's range. Either way, there is absolutely no way that we can be bothered to sell this market as it is far too strong lately, showing real demand.

Gold

Gold Forecast January 27, 2012, Technical Analysis

Gold Pivot Points (Time Frame: 1 Day)

 Name  S3  S2  S1  Pivot  R1  R2  R3

 Classic
1676.0000
1689.6500
1703.1000
1716.7500
1730.2000
1743.8500
1757.3000

 Fibonacci
1689.6500
1700.0022
1706.3978
1716.7500
1727.1022
1733.4978
1743.8500

 Camarilla
1709.0975
1711.5817
1714.0658
1716.7500
1719.0342
1721.5183
1724.0024

 Woodie's
-
1689.6000
1703.0000
1716.7000
1730.1000
1743.8000
-

 DeMark's
-
-
1737.0250
1720.1625
1709.9250
-
-