Gold markets rallied slightly during the day on Thursday after initially dipping, showing signs of life. The $1250 level is an area of extreme interest, so it’s likely that the market will continue to see a lot of volatility in this area, and I think that we could see sellers coming back in rather soon. Ultimately, I think that the market will eventually go looking towards the $1265 level, but we need the US dollar to drop in order to see that. Otherwise, we continue to go back and forth, and I think that there is a bit of range bound trading overall, at least in the short term.
The $1200 level for me is the “basement” of the market, and I think that a lot of huge demand is pent up in that region. I do think that it’s possible we go down to that level, especially if we continue to see overall strength in the US dollar. Otherwise, the $1300 level could be a longer-term target. I believe that the markets could continue to go even higher over the longer-term, but at this point I’m thinking in terms of months, not days. I like the idea of buying gold eventually, but I don’t know that the support in this region is ready to hold for longer-term move. I anticipate a lot of volatility in this area, and I think that short-term traders will continue to bounce around this overall region, but longer-term traders will be looking for lower levels to pick up money.