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Gold explodes; silver charging higher

Commentaries & Views

The metals continue to charge higher, with gold in a blow-off pattern with parabolic moves on heavy volume. Although we have been bullish for an extended period, the pattern itself suggests a pullback is near. There is no reason to sell here; however, we wouldn’t be chasing gold higher with new money.

Silver, on which we had been bearish until the other day, has been riding along with gold. Our expectations are for a pullback in silver, which will create a buying opportunity. One negative in the silver pattern is it failed to reach the Jan. 8 panic high. Although we have turned bullish, we are waiting for a support level to buy.

The bottom line in both gold and silver is that they need to see some profit-taking if this is going to be a long-term bull market. All the pieces are in place for the rally to continue, but the healthiest action from here would be a pullback to support. We are bullish on gold and silver.

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.