By FX Empire.com
Gold markets had a strong week as the demand for the yellow metal continues. The central banks around the world continue to press forward with their monetary policies of easing, and this will continue to drive demand for all things that are risk-related. The gold markets should continue much higher based upon not only the recent action, but the action that we have seen over the last ten years in this market.
The $1,750 level gave way during the week, and this opened the door to the $1,800 level. The market couldn’t get over that mark, but one cannot help but feel that it is only a matter of time before it happens. The recent downtrend line has been broken, retested, and confirmed. Because of this, it looks like we are ready to have another large move upwards in this already strong market.
The $1,800 level is next. $1,900 should be shortly after that, and we still think $2,000 will happen much quicker than people think in this market. The need for safety assets will continue as well, and there will be a lot of headlines that could push price in either direction. Because of this it looks like the market could be volatile, but the overall trend should rule the day.
The $2,000 level will certainly cause some kind of reaction, and a lot of profit taking could happen at that point. However, as with all areas so far, profit taking simply is a chance to buy gold at much cheaper prices. We think this trend has legs for some time to come.
The breaking of $1,800 would be our signal to go ahead and put on positions aiming for the $1,900 and $2,000 levels. The market simply cannot be sold at this point as the support has been far too great. The $1,500 level would have to give way in order for us to consider selling now. This is very unlikely, and as a result we are constantly looking for bargains in this market as the trend is so strong.
Gold Forecast for the Week of February 27, 2012, Technical Analysis
Originally posted here
