A near 8% gain in a month is quite a move up in a short period of time and ordinarily one would expect a correction. Frequently a 50% retracement of the gains takes place. This could take us back to the $1,300 level which acted as resistance before. Previous resistance frequently becomes support.
We are always a bit nervous when gold prices rise this much, this fast. At the same time the sharp fall in bitcoin and crypto-currencies is leading to an increase in demand for physical gold and there is robust demand from China ahead of the Chinese New Year.
We are a little cautious in the very short term but very positive in the medium term and see gold over $1,500 in 2018.
The SPDR Gold Trust ETF (GLD) rose $0.72 (+0.57%) in premarket trading Friday. Year-to-date, GLD has gained 2.40%, versus a 4.60% rise in the benchmark S&P 500 index during the same period.
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