Gold markets have initially falling during the trading session on Tuesday but found enough buying pressure and demand at the $1220 level to turn things around and reach towards the $1228 level by the time New York came to work. It looks as if we are trying to form some type a basing pattern, not only in the gold market but also the Australian dollar. I believe that it is only a matter of time before the market tries to reach towards the $1250 level. I also believe that longer-term investors are starting to pick up gold “on the cheap” as we have seen it beaten down so drastically. Given enough time, I fully anticipate gold to enter a bull market, but we need the US dollar to calm down first. I believe that could be coming later this year, but in the meantime expect a lot of choppiness and back-and-forth type of trading. However, from a longer-term standpoint I do like the idea of buying at these lower levels.
The $1200 level underneath is the “floor” in the market as far as I can see, and I would be surprised if we broke down below there. If we did break down below that level, it would be very negative indeed, and could see the market go as low as $1000 over the longer-term. However, I do not think that this is going to happen anytime soon.