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Gold markets have been on a tear lately, as you undoubtedly already know. At this point though, we are getting a bit stretched and it’s probably only a matter of time before we see some type of pullback. I suspect that pullback will be during the month of February, although it will more likely than not just end up being a buying opportunity.
- It’s very likely that we go looking to the $2000 level, where we had seen a lot of resistance in 2022.
- Whether or not we can break above there is a completely different question, but right now it certainly looks as if gold is doing quite well and could continue to see buying pressure.
- However, when we look at the longer-term charts for gold, we are getting close to an area that has been very difficult to overcome for the last 3 years.
- Granted, this latest push higher has been quite a bit more parabolic, but at the end of the day, this is still a market has to recognize gravity.
The Stochastic Oscillator on the weekly chart is in the overbought position, and at extreme levels. At the very least, I think we need to pullback in order to entice more buyers into the market. It’s going to take quite a bit of courage to short this market considering just how bullish it has been. The February 1 Federal Reserve meeting could have a lot to do with what happens next, because they will have an announcement that they will almost try to do anything they can to crush risk appetite. That may take some of this speculative money out of gold, but you still have to keep in mind that there’s a lot of money in this market just simply trying to preserve wealth. With that in mind, there is still going to be a certain amount of interest that this market. However, what I find interesting is that if we do fail at the $2000 level, we have simply reached the top of a longer-term consolidation area. That’s it. After all that noise, it would just be more of the same in the big picture. Having said that, I do anticipate a selloff in February, which more likely than not will be jumped on, unless of course the Federal Reserve really start scaring people.
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