Gold Chart Updated

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.