Click to Enlarge First and foremost — and despite everything the rest of the media is telling you — gold is an enigma; a mental construct built on assumption. Don’t worry about the so-called fundamentals, as nobody actually has a bead on them. Gold’s all about the chart and speculation.
On that note …
While it was overbought and due for a pullback, the selloff that gold has suffered this year was overdone. After reaching a major support line around $1,200 per ounce a couple of weeks ago, the rebound started, and it’s progressing nicely. Given how oversold gold was, we should see prices return to $1,400 before it hits its next headwind. At that point, we’ll be back at the crossroads, and most likely resume the downtrend at a better-tempered pace.
There’s room for a decent trade between here and $1,400, though.