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Gold tests the panic high; silver breaking out

Commentaries & Views

The metals continue to surge, as gold tested the Jan. 8 overnight, silver may reverse, and platinum continues to run. This action can be either bullish or bearish, based on how the metals trade the next couple of days.

Gold and platinum are in a possible blow-off formation, which means that this breakout out should fail, followed by some consolidation, before resuming the rally. The higher volume and price action indicate a slight pullback is close; however, the pattern remains bullish.

Silver is in the process of breaking out although the pattern is the same -- a blow-off formation. The key here is if the rally continues in silver, this may turn out to be a short-covering squeeze. However, a pullback that holds support at $18 basis March futures would indicate a breakout.

The next couple of days will be important in all of the metals, deciding the fate of the next big move. At this point we remain bullish platinum and gold but neutral to bearish silver. Today could tell the story.

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.