After the punishing sell off in Gold from 1350 to 1280, buyers have come back pushing it above 1300. All the recent action is consistent with gold forming a new bottom at a higher low. The pattern has been as scripted without violating any major support levels.

If there are concerns about Gold and Silver, it would be the light volume that has driven this recent rally from support. However, volume or no volume, the simple fact is the metals held support and rallied.

Our expectations are for this recent rally to fail at possibly as high as 1320. There should be a retest of the recent lows, but it does appear the bottoms are in and consolidation likely for a undetermined period of time. We will look at pullbacks as buying opportunities.

Todd Horwitz
Chief Strategist