Gold is tracking sideways remaining above support at the recent bottom near $1636 but unable to get much going to the upside. The rest of this week will see reduced liquidity and thus the possibility of increased price swings. Unless we get a large sustained move in either direction, I would not read too much into the price action this week. Perhaps the only event that might provide some fundamentally-based direction would be news regarding the so-called 'fiscal cliff'.
Silver continues to look much weaker on the charts than does gold. Some of this is no doubt tied to the fears regarding the lack of an agreement of that cliff issue. The reason I say this is because copper is also getting knocked down and has fallen some 20 cents off its recent best levels near $3.72. Unless copper reverses to the upside, silver will have some trouble getting anything going.
Silver experienced only a brief or mild bump off its recent low and then gave a fair amount of that back today. This market will not attract any momentum-based buying whatsoever unless it can get back above 31 which will force some shorts out and issue some signals to the algorithms to begin some buying. If the recent low does not hold, I see no chart support until $2850 - $28.30.
"When misguided public opinion honors what is despicable and despises what is honorable, punishes virtue and rewards vice, encourages what is harmful and discourages what is useful, applauds falsehood and smothers truth under indifference or insult, a nation turns its back on progress and can be restored only by the terrible lessons of catastrophe." … Frederic Bastiat
Evil talks about tolerance only when it’s weak. When it gains the upper hand, its vanity always requires the destruction of the good and the innocent, because the example of good and innocent lives is an ongoing witness against it. So it always has been. So it always will be. And America has no special immunity to becoming an enemy of its own founding beliefs about human freedom, human dignity, the limited power of the state, and the sovereignty of God. – Archbishop Chaput
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