Global Watch: 23rd April 2007
A snippet from the latest weekly issue of GoldForecaster.com [1]
THE MARKET in physical gold bullion continues to show great strength, now pushing $690-700.
Good support is seen along the 50-day moving average, currently holding at $668 and moving higher along with the channel support that now sits in the lower $680s.
$690-700 and then $730 remain upside targets. Given the action of the past few months, the market is showing us that it is only a matter of time. With this steady march higher here, gold is looking quite healthy.
There are a few factors to consider here, however. Resistance is quite heavy around $690-700 while the US Dollar is nearing a series of very strong multi-decade supports. It should be expected that there should be a battle before the inevitable fall in the US Dollar. That will bring with it another large impetus into the gold rally.
Conservative investors could play the $700 resistance by selling into this strength and wait for a pullback. Alternatively, they may wish to buy back into the market on the break of the $700 mark.
That said, the growing recognition that the US Dollar may move significantly lower is generating more interest in gold and a temporary bounce in the US Dollar may not cause gold to retrace. In fact, gold may continue to move past $700 on its way to $730, $750 and then $800 in the process. The market is primed to make the move higher.
Repeating from past issues of the GoldForecaster [2], "The gold market looks like it wants to move higher at this time, but we may need to do some more base building around the mid to upper $600s first before we see the next move higher – which is likely to bring $800+ gold. I do believe we are drawing closer to the point where gold will take its next rally higher though.
"This is a time to continue to position yourself and ensure the core positions are solidified."
Pullbacks are very attractive at this time! For the entire report, please visit GoldForecaster.com [3].