Gold Burst Stops On Schedule
Kitco Commentaries | Opinions, Ideas and Markets Talk
Featuring views and opinions written by market professionals, not staff journalists.
As if we could see into the future, the rally in gold slowed on Wednesday, almost reaching the $1,350 first resistance target we wrote about yesterday. The magic arm of the market put up the stop sign, and gold sold off from $1,349, closing at $1,333.
That type of action was not only expected but healthy for the gold bulls. All markets go through phases. Gold is in the trend phase and appears to have more room to run to the upside. The speed of the recent rally and the angle at which it rose told us that the $1,350 level should see the rally stall temporarily.
Gold is higher this morning and could test the $1,350 level again, but the best action would be sideways for a few days. Even a pullback to the $1,310-$1,320 levels would not hurt the uptrend in gold. Until further notice, pullbacks to solid support levels should be bought.
Silver is starting to break out to the upside and could start to follow gold higher. The key hurdle left for silver is $15, as a break above there should take it to $15.20. If silver breaks out, our first major upside target is $15.60.