Greetings!,

Considering the major moves to the upside seen in the precious metals last week this small correction is but a drop in the bucket. However, this drop in the bucket has occurred at a predetermined point that we have marked as a potential resistance area for some time now. We need to pay close attention to determine whether this pivot point is a consolidation area or an area in which a correction has begun.

In either case, long-term I am still looking for gold to break above 1800 and believe 1850 is a possible upside target if not higher. It is the interim or short-term assessment that is undetermined at this point. Both candlestick indicators as well as Fibonacci retracement areas have pointed to this area in both gold and silver as potential pivot points. Today's small downside move is not indicative of a strongly corrective market. We could be witnessing either a consolidation or the beginning of a correction. We simply need more information to make our final assessment.

As always wishing you good trading,

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Proper Action

On Friday we hit a level in both gold and silver that we have earmarked as a point for potential resistance. Since that time we have seen the market weaken. The question is whether or not this is a point of consolidation or a corrective indication. We will monitor the market closely and raise our stops if need be.

GOLD: Maintain Long @1580. Our current stop sits just below 1706. My recommendation is to maintain your current position and stop placement.

MARKET FORECAST

Gary S. Wagner

Gold & Silver: On a technical basis both gold and silver have not only hit a potential pivot point and traded lower, but now our Japanese average charts are also showing a potential pivot point as we have identified doji candles in both charts. We will monitor the market closely and I will send out trade recommendations accordingly. 

Gold Daily Chart

 SILVER Daily Chart:

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