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MENAFN- Daily Forex)
There was a decidedly risk off behavior in the markets at the beginning of the session on Monday. I think really at this point in time, we will continue to see a lot of hesitation to try to push Gold higher. I mean, after all, you've got a situation where it had run pretty high to begin with.
I think ultimately, you have to understand that this is a
market that continues to see a major barrier in the form of $2,800 above. Breaking above the $2,800 level would allow
gold to reach escape velocity, but I don't know if that is going to be the easiest route to take at the moment. All things being equal, I think it does happen, but I also recognize that we need some type of fundamental or momentum ability and reason for this to occur.
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After all, gold is highly sensitive to central banks and interest rates, and we also have a lot of issues right now when it comes to central banks. With the Federal Reserve and the Bank of Canada on Wednesday and Thursday, we have the European Central Bank. So I expect gold to be pretty noisy this week. But by the end of the week, maybe with a little bit of luck, we'll have some clarity. Ultimately, I think given enough time, we do break above $2,800. And once we do, gold will probably go looking to $3,000. In fact, that is my target at the moment. The $2,700 level below, at least for right now, for me, is a short-term floor. So, I do think that there'll be buyers coming back in, but it may take a couple of days, a little bit of stabilization, and maybe a little bit of luck with the central banks to make that happen.
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