Gold closed last week at $1,280/oz. That’s a 4-month high.
The yellow metal is bouncing off November’s lows and it’s doing so in good trading volume. Increasing trading volume indicates a stronger appetite for the metal, giving more credibility to the move.
Gold is rising while weakness is developing in foreign markets. The move coincided with the enormous swiss franc spike. While gold’s move seems encouraging, we need to remember that commodities are getting hit and that the dollar keeps making new highs. Both of these developments are negatives for gold.
Gold remains in its downtrend, and the rise could be nothing but bargain hunting. To determine that, we’ll have to wait and see if gold is capable of reaching more significant levels. $1,400/oz will be a level to watch. Meanwhile, the best choice is to stay with the trend.