HardAssetsInvestor

Written by Sumit Roy  |

February 07, 2012

Precious Metals Monitor: Minor Gold Correction Ends, Rally To $1800 Resumes

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We offer our latest analysis on the precious metals market.

Selling pressure finally hit precious metals as the rally that began at the start of the year stalled over the past few days. Gold fell as low as $1710 from $1763, but is already on the rebound. Clearly, this was merely an episode of minor profit-taking after a sizzling rally that took the metal up nearly $250 over the course of a month.

We would look for prices to continue their climb toward the next level of resistance at $1800 and eventually test the record high near $1921 later this year.

Silver may rally toward the $35.50-to-$36.50 resistance area, where it will face a key test from a downward trend line that extends back to the record high of last April.

Unlike gold, silver is still technically in a downtrend; thus, the outlook for the white metal is much more uncertain until we see a decisive breakout.