Greetings!,

Today's trading activity across the board is being described as a risk off environment. With oil trading substantially lower on the day, and U.S. equities also trading lower, the precious metals markets experienced a strong and much-needed rally.

It was reported today that Spain's banking sector has asked the E.U. for help. This of course put the current sovereign debt crisis in the European Union back in the forefront of many traders' minds. Prompting not only a sell off in the equities markets and oil markets, Spain's banking issues were highly supportive and bullish in the precious metals sector, specifically gold and silver.

Also noteworthy was a stronger U.S. dollar in tandem with a stronger gold market. This indicates a return to a safe haven mentality in regards to gold investing. When the markets witness both a stronger U.S. dollar and higher gold prices the concordance must be noted. Gold and the U.S. dollar moving higher at the same time indicate safe haven buyers entering the market.  

As always, wishing you good trading

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Proper Action

 GOLD & SILVER :

A continuation of today's rally would be a significant indication of support in gold at 1580. As such we would look to reenter the market from the long side. 

MARKET FORECAST

Gary S. Wagner

Gold & Silver: Today's upside move in the precious metals markets indicates a potential support level at around the 1580 level. This is significant because our prior support level ( should this level hold ) is around 1520. If gold rallies above this point on a sustained basis, it would indicate a higher level of support, and this higher low would provide technical evidence of the potential bottom. Since we have seen the market sell off over strongly over the last month, I believe that we should err on the side of caution, as we await an entry-level in gold and silver. In other words, let's not make any rash moves.  

Gold Chart   

Silver Chart

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