Gold And Silver Retrace

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Both Gold and Silver have been able to stage muted rallies off their recent lows. It does not appear to us, yet at least, that the pattern developing off these lows is a bullish one. Also of significance, we believe, is that the highs of today’s trading stopped up against their respective 50 day moving averages.

It makes sense to us that this would be a critical barrier and closes above the 50 day moving average for both the Gold and Silver will be needed to turn the situation more optimistic for the bull case at this point in time. In sum, there may be lower to go before the correction is complete.

Above the 50 day moving average in the February Gold contract is the near term .618 retracement level of approx. 111700 that may pose some resistance as well.

Good trading to all

Jeff
CB&S