As if we could see into the future, the rally in Gold slowed on Wednesday, almost reaching the 1350 first resistance target we wrote about yesterday. The magic arm of the market put up the stop sign, and gold sold off from 1349 closing at 1333.

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 1350 should see the rally stall temporarily.

Gold is higher this morning and could test the 1350 level again, but the best action would be sideways for a few days. Even a pullback to the 1310-1320 levels would not hurt the uptrend in gold, until further notice pullbacks to solid support levels should be bought.

Silver is starting to breakout to the upside and could start to follow gold higher. The key hurdle left for Silver is 15.00, a break above there should take It to 15.20. If Silver should breakout, our first major upside target is 15.60

Todd Horwitz
Chief Strategist