Gold has finally done it. It pushed over $3,000 per ounce in this morning’s European session, marking a significant milestone in the rally which began in December 2015.
It first broke above $2,000 in August 2020. But it subsequently pulled back, and only made a decisive break above $2,000 in February last year. Since then it hasn’t looked back.
But the big question is: what now? At the time of writing, gold had dropped back below $3,000, indicating that traders are treating this level as an area to take profits and/or go short, rather than as a marker for buy-stops and taking on fresh long positions.
Source: TN Trader
But it seems likely that most short-sellers will have their stops placed a bit above the big figure. In addition, it takes time for traders to get comfortable trading in uncharted territory.
It will be very interesting to see how gold behaves going into the weekend. It’s worth noting that it is far from being overbought at current levels. Silver is also making positive progress, and $34 remains a key level for it to break above and then hold.
