Gold rallied sharply overnight to trade at fresh record highs, just a few dollars short of $3,130. It pulled back a touch in early European trade, but then regained its footing after the US open.
But it remains the asset of choice for investors, anxious to cut back their exposure to equities, while jumping on the back of something that is trending in the right direction. Gold has rallied over $100 since this time last week, and those gains have contributed to a move of 20% since the beginning of the year.
Given that, and given that gold hasn’t had a significant pullback in over four weeks, it feels as if the air is pretty thin up here above $3,100.
The daily MACD, is, guess what, very overbought. But it is still below the highs from mid-February which came ten days before gold’s last significant correction. If there is a sell-off, then it looks as if $3,000 will be the first significant level of support.
Meanwhile, silver is, yet again, struggling to break higher. It has managed to nose above $34, but it has yet to achieve sufficient upside momentum for it to retake last year’s highs, let alone break above $35.
