After Tuesday night's sharp pull-back, metals bulls are showing resilience, having taken gold back up over $1,850. Silver has gone from a picture of frustration to that of hope in a very short amount of time. Seasoned traders will fight every instinct to act on emotion, choosing to rely on probability; sometimes, the probabilities change quickly.
Should silver realize a close over the yellow highlighted area, a move higher to around $23.50 becomes ever more likely. For gold, a close above $1,865 this week would likely open the door to $1,885 and then $1,900 again. In this choppy environment, traders may elect to wait for a close above the aforementioned levels for a sign that a trending move up (at least in the short term) has begun.
The same goes for the S&P 500, which threatens to close the week within the yellow highlighted area. Should bulls succeed, a move higher back to the top of the box becomes likely. Could gold and stocks be anticipating a longer-term top in the USD?
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