Tuesday in the overnight session Gold hit 1500 on three separate occasions looking like it still wants to go higher. As I write early this morning, Gold is just below, but the pattern is setting up for a potential close above there today.

On a short-term chart, gold continues to make higher highs and high lows and looks poised to make a run to our new target of 1600. Looking at the speed at which Gold got to 1500 we would say “not so fast” there should be a little slowdown here if this rally is going to continue.

Although we will like markets to go up as fast as they can when we are long, if gold doesn’t pullback and consolidate soon the rally could be ending. There is a lot of evidence that the rally will slow and reload for the next charge higher, however it would be more powerful to see some sideways action for a few days.

Silver is also breaking out again, however Silver has more room to run to the upside at these levels with the Gold/Silver ratio at 90. We would look for Silver to take the lead and Gold to take a rest for the next week or so.

Todd Horwitz
Chief Strategist