By: John Fisher
Choppy trading conditions out there…
Gold and silver were looking good a few days ago after a short covering rally caught speculative bears on the wrong side of the metals. However, the rally higher was stopped firmly in its tracks today. With concern that the Federal Reserve will scale back its stimulus next week, gold has dropped $30 while silver has fallen nearly $1. U.S. retail sales in the month of November beat forecasts and car sales rose to a six year high. As a result, the USD has taken recovered its recent losses against the euro and the DXY index (a barometer of USD strength) has moved back above the 80 handle.
Gold’s near term trajectory remains clouded. Support is waiting first at the psychological level of $1,200 with much more significant support below at $1,180. Above the market, any rally will likely be sold ahead of $1,277, the 38.2% Fibonacci retracement of the move from $1,180 to $1,434.
Silver support level??? $19.00 psychological followed by $18.80 and $18.07 technical levels. Resistance at $22.00 and $25.20.
All Things Considered – John’s Commentary:
Both metals are on sale, especially silver. Hold what you have. Continue to average into the lower prices with modest purchases.
A progression of perspective:
“Gold is Money. Everything Else is Credit.” – JP Morgan
“Gold and economic freedom are inseparable.” – Alan Greenspan
“Gold is NOT Money.” – Ben Bernanke
