Gold (AMEX:GLD) and Silver (AMEX:SLV) both recovered slightly from yesterday afternoon’s mild sell off to trade again in a very tight range for most of the day. Gold hit an overnight high just below $1780 per ounce but was unable to hold it once the European market opened. The chart for Gold at this point is very constructive and it looks to be building a solid base after a $250 run in the past 7 weeks. The double top at $1800 per ounce will be relatively formidable resistance but the longer Gold bases in the range just below it the stronger the push through $1800 will be.
For Silver the magic number in the short term is $35.00 on an hour basis. That will give it the opportunity to make a run at $35.50 and then, after that, $37.50. $37.50 is an important level to best as it was the close for the week of February 21st. $37.50 is the blow-off peak from the following week which included the Leap Day Massacre that saw Gold whacked for more than $100 and Silver more than $2.00.
So far the metals are acting exactly as I would expect in an environment of stated QE to infinity with shallow, short-lived pullbacks and a series of higher lows and slightly higher highs as we inch towards major turning points on the charts as the central banks attempt to calm the markets. If anyone doesn’t think they are in massive intervention mode this week has not been looking at the massive buying in the 30 year U.S. treasury bond which has pushed the yield back below 3.00% after last week’s very rational sell off.
The last gasp of Operation Twist has apparently begun.
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