Gold Market Continues to Rally

LONDON (April 21) The gold market has exploded to the upside during trading on Monday as we continue to see a lot of concerns with the US dollar and of course the actions of Donald Trump. The tariff situation hasn’t gotten any better and until it does, it’s very difficult to imagine a scenario where traders get aggressively long the US dollar, which is exactly what you would need to see for the gold market to turn things back around. That being said, it is overbought and it’s very difficult to get aggressive here. As far as shorting is concerned, I would not be looking forward to doing that anytime soon.

I think you’ve got a situation where there’s just way too much demand out there to consider trying too short. If we pull back the $3,200 level could be an area where a lot of people will be looking to get involved and take advantage of cheap gold. But as things stand right now, I think this is a one-way trade and it is starting to get out of hand. But ultimately, these runaway trades can go on much longer than you anticipate. So, keep that in mind.

I would have no interest whatsoever in trying to fight this trend. I would of course like the idea of a pullback that I can find some cheap gold, but as this candle looks like it’s going to continue to explode to the upside, I think $3,500 is calling. This could even be the case by the end of the day at this rate.

FXEmpire