Gold Continues to See Supportive Action

NEW YORK (April 29) Gold continues to see a lot of volatility, but in the end, it sees more support than anything else. This is a market that should be approached with a bit of caution as far as position size is concerned.

Gold Markets Technical Analysis

Gold has initially fallen overnight during the off hours on Monday, but at this point in time, it does look like it is trying to do everything it can to recover and perhaps take off to the upside. In general, this is a market that I think will be very noisy but bullish underneath.

The $2,300 level is likely to be an area of significant support and I do think a lot of people will be paying close attention to it. If we were to break down below the $2,300 level, then the 50 day EMA comes into the picture. The market has been strong for some time, and I just don’t see how it will change anytime soon, especially considering there are so many concerns out there.

Nonetheless, I like this market. I like buying short term pullbacks, and those pullbacks should continue to attract a lot of inflows. The $2,400 level above is a major resistance barrier, and I think at this point we might be trying to come into a $100 consolidation area working off some of the froth from the massive shot higher. I have no interest in shorting gold because I think gold is far too strong and there are far too many concerns out there that could make gold go higher, and as a result you have to think of dips in this market as an opportunity to pick up the possibility of “cheap gold.” This is the way the market has been trading for some time, and it should continue to do so unless we see some kind of major change in attitude and fundamentals.

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