Gold is looking very strong but markets don't just go straight up. You can see on the chart below the steepness of this latest move and how far it is away from the 50MA now, gold is due for a consolidation or pullback. Traders entering the market now would be entering with increased risk unless you are trading very short-term.
@Sean K has mentioned this earlier and now this market has entered into my look-for-pullback zone.
View attachment 186076is latest
Markets don't go straight up... except when they do. Sean's chart shows two great examples. Gold is quite an exceptional commodity. It's not just a company held by mum and dad shareholders who are going to react according to simple and often foolish thinking, and it doesn't exist off anyone's radar. It's gold. It is on the radar not only of every investor in the world, but right up to every national government in the world. It follows different rules even from bluechip companies - the government of Brazil or Mozambique or Germany won't be buying, selling or holding any BHP, but they certainly deal with gold.
Right now we all know gold is on the way up. Widespread inflation and the severe weakening of the USD make that inevitable. Why would you be selling gold right now? If we were looking at the same chart on an ASX-listed company, sure, you'd be getting an itchy finger hovering over the sell button, looking for a swing trade, even if you loved the fundamentals, but this is gold, it's a different game, the entire world knows it's going to go higher and the highest level players in the world and all staring right at it.
Obviously at some time it will pull back and/or consolidate, but in this case it's most likely going to overshoot before doing that rather than pulling back before running higher. It's very difficult to calculate gold's value now since gold's value has never really made any sense, but given how we value gold, how extreme inflation is and how bad the decline of the USA and her currency is, gold is clearly going a lot higher than it current is, everyone knows it, so we're unlikely to see much of a pullback for a while. *just this second gold hit a new all time high* Sure, we might see a pullback to $2600 or even $2500, but we also might keep running without much of a pullback or consolidation until $3,000 or more. Such a run would not be unprecedented for gold, and the current global situation is clearly quite extreme - the global money printing for the recent covid insanity was extreme, and in the big gold runs of 1980 and around 2010, we weren't seeing the world staring at the collapse of the USA. We also have a very obvious TA setup, the multi year cup and handle, which we started running up out of this year, which has a technical target of around $3,000, which is all sorts of obvious as a checkpoint we're likely to reach without a pullback or even much of a consolidation.
Of course, anything could potentially happen, but that very much includes gold going for a huge run, ignoring things like the 50 day MA.
Thanks, Sean, for posting that chart.