Once again on Tuesday Gold attempted to breakout above the 1310 resistance and once again failed. That doesn’t mean it won’t breakout today but 1310 is showing a formidable foe keeping the metal in the consolidation phase.

Gold is slightly higher this morning but still below the 1310 level. There is no telling when the yellow metal will breakout, but based on the recent action our expectation is to see gold fail and head back to the 1290 level.

The fact that gold has made higher lows indicates the future is bullish, however for now, expectations are flat to lower. This action is common in all markets, investors should hold while traders should be looking for a pullback.

Silver is in a similar pattern, but should breakout to the upside before gold. Silver is in the same pattern as gold, but congesting at the bottom end of the consolidation pattern. For now, expectations are for both metals to churn, testing support before breaking out.

Todd Horwitz
Chief Strategist