By FX Empire.com
Gold markets absolutely took off during the past week as traders sold the Dollar off again. The Federal Reserve has decided that interest rates are going to be at historic lows until the end of 2014, and this caused the already rallying gold markets to kick it into high gear.
The $1,700 level was sliced through like it wasn’t even there as an example. The market is about to get a whole lot more bullish it seems as there are financial crises everywhere, and the Fed, ECB, and BoE are all ready to ease as much as humanly possible. This should be another massively bullish year for gold as the markets continue to skyrocket.
Until the Fed or ECB stop bailing everyone out, it seems highly unlikely that the gold markets will slow down. The gold bugs will all point to deficits and austerity in the same sentence. It seems traders simply do not trust the central banks anymore, and even the central banks themselves are buying gold in large quantities. In other words – they don’t trust each other entirely as well!
The candle that has formed for the week was very bullish, and managed to break well above the downtrend line that we saw in this market that had been depressing markets over the last several months. The clear push higher has us only buying this market, and even willing to do it near these levels, although a pullback would be nice as it gives us a chance to buy it at cheaper levels. The trend is most certainly up for the last 11 years, and there is nothing to suggest that this is going to change anytime soon.
The $1,750 level is next, and it will offer a bit of resistance going forward. However, any pullback from that level will be viewed as a buying opportunity in our eyes as we simply can only follow the market and buy. The $1,650 level should be massive support at this point, and we suspect that it will be some time before we see that level again. Buying on pullbacks is still our favorite way to trade this market.
Gold Forecast for the Week of January 30, 2012, Technical Analysis
Originally posted here
