A few weeks ago, we identified the bottom in gold and expected a rally to the 1350 level. Gold achieved the 1350 level on June 7th followed by a sell off to support which is now firm at 1330. Basically, gold is stuck in the middle of the range and looking to breakout one way or the other.

The formation is similar between gold and silver with one exception, Gold looks to be headed higher while silver is still leaning to the downside. Obviously, either or both patterns can change at any time. However, with gold looking strong and apparently getting stronger, silver should follow gold.

Gold and Silver are higher this morning, but both are in consolidation. There is some news today, a couple of oil tankers were attacked in Oman. With the unrest one would think gold would be spiking higher which is not the case. Eventually the congestion pattern will end, for now it looks like it will breakout to the upside bringing 1400 into play.

Todd Horwitz
Chief Strategist