Although we have been bullish Gold since the 1280 level and achieved our first target of 1500, all week we wrote we thought that gold would churn around this level before finally breaking out. However, with all of the troubles around the globe and all central banks cutting rates, Gold exploded on Wednesday trading as high as 1522 December futures.
The big question is where gold and silver go from here. That is a tough question because silver has trailed gold throughout this rally and the ratio between the two has expanded. The rally in silver should continue while we expect a pullback to 1500 in gold.
When investing or trading, pullbacks or sell offs are healthy for markets. We would welcome a pullback in gold and are still buyers looking for our next target of 1600. This morning’s pullback is expected with the speed and parabolic move from Wednesday.