Gold Futures at Pivotal Level

Gold futures gained nearly $40 on Thursday to close at $1,857.50 an ounce. There have been several developments that have caused some volatile trading in gold recently.

One main issue deals with the Swiss central bank basically supporting the Euro to keep its currency from strengthening. This takes away a safe haven investment as many investor have been parking money in Swiss Francs. The currency has fallen and will likely be under pressure for a while. However, I doubt this will work long-term. Eventually the Swiss Franc will be a strong buy.

We are also seeing more signs of weakening economies in the U.S., Europe and Japan. President Obama is giving a speech tonight on his new jobs program, which is expected to cost $300 billion. Does this sound like more debt to you? Yes, more stimulus and more debt. It is not an issue of whether the programs are needed, but it is a matter of more debt that is fueling the gold rally.

The markets are creating more building blocks for gold to rally. Orders for the dollar printing presses are backlogged for years down the road - figuratively speaking, of course. That means gold should continue moving higher as long as this game is played.

The gold market managed to spike above $1,900 on Tuesday but fell back below. This could be considered a false breakout and negative short term for the technical picture. We could get some big movements in gold on Friday and that might confirm a short term negative reversal or the market could break above $1,900 again and have a quick run to $2,000.