Gold Finds Serious Buying After Reaching A Low

GOLD

I didn’t see today’s correction coming, but a combination of a number negative issues all hit the market at the same time. Among them, a higher U.S. Dollar Index and 10-year interest moving to a six-month high has caused the Gold price to drop below the important $1,900 & $1,850 support level. After breaking $1,900, short-sellers took control, supported by reports of central banks selling of Gold. After reaching a low of $1,828 per ounce, Gold found serious buying.

I will provide more information in Monday’s Weekly Market Report, but every major Gold and Silver rally over the past 40 years, has started with a sharp sell-off. Today's correction will clean out the speculators with margin calls today and Monday. Past corrections like this only lasted for 1-3 days, and then the price never looked back. At 11 am PT today, Gold is trading at $1,840 per ounce, down $75 on heavy volume.

SILVER

As Gold sold off, Silver broke below the $27, $26, and $25 support levels. Silver reached a low of $24.42 before seeing large bargain buying (including myself). Right now, the bears and short-sellers are in control, however, I believe we will see profit taking by the end of today’s trading, with a rally before the close. At 11 am PT today, Silver is down a whopping $2.30 per ounce, trading at $24.89 on heavy volume.