A few weeks ago everyone was talking about gold, it hit all times high, it was time to buy gold, etc. It probably had the best rally ever, almost reached the $2000 mark. Now let’s ask ourselves a question: Why did it go up? There is no right or wrong answer, but I’m sure most of you agree that gold went up because of the world economic conditions (therefore using gold as a safe haven), they are not good.
Now, XAUUSD has retraced, it dropped like a rock, and probably had its worst fall ever, it almost reached the $1500 mark in a few days. Talking fundamentally, does this drop make sense?
I don’t think so, world economic conditions haven’t changed, so I think we could see gold reach higher levels.
Is this the right time to trade gold?
Nope, it is trading pretty close to an important support level. I’d like to see it trading in a short term range first, then a breakout of the ST resistance level, only then I’ll be ready to trade it, for now, I’ll wait.
What do you think?