Gold & Silver Suffer A Correction, But Still On A Bullish Track

	China Says It Only Adds 5.9 Tonnes Of Gold To Reserves In August
	The Peoples Bank of China (PBoC), the nation’s central bank, has reported a 5.91 tons . . . . Lawrence Williams (Read More)
	Levels To Watch In The Wild Silver Market
	Silver can be a highly volatile member of the precious metals sector, at times. Both gold and silver . . . . Andrew Hecht (Read More)
	Big Correction In Gold, Silver And Platinum
	Nothing ever runs smoothly in precious metals valuations and Thursday and yesterday saw all the profits . . . . Lawrence Williams (Read More)

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Let’s recap the recent Gold rally and last week’s correction.

From July 5th to Sept 5th, Gold rallied from $1,397 to $1,550 per ounce, a $153 increase (11%) in only two months. On Friday, Gold closed at $1,506 per ounce, down $14 for the week and $44 from the Sept 5th high. Gold is definitely on a bullish rally and corrections from time to time are expected and badly needed to sustain a solid move higher. On January 1st 2010, Gold was trading at $1,100 per ounce, and by Sept 11th 2011, Gold reached $1,920. During that 21-month period, there were ten corrections of a minimum of 4%. Buying on those corrections had been highly rewarding.

Two of the factors causing last week’s precious metal correction were the White House indicating trade talks with the Chinese would resume next month, and revealing strong payroll data figures, well above expectations. These announcements aren’t by themselves significant, but the precious metals markets badly needed a correction, so these issues started the ball rolling.

Gold could briefly break below the $1,500 resistance level this week, but I doubt Gold will stay below $1,500 for long. I would expect to see Gold build a solid base between $1,500 and $1,550, but if the Silver price explodes higher, Gold will go with it.

Today: Gold has traded today between $1,498 and $1,513 per ounce as weak economic data is coming from both the U.S. and China. There is substantial support for Gold around the $1,500 support level.

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Recapping the recent Silver rally, last week’s correction was far more volatile.

From July 5th to Sept 5th, Silver rallied from $14.90 to $19.40 per ounce, a $4.50 increase (30%) in only two months. On Friday, Silver closed at $18 per ounce, down $0.20 for the week and $1.40 from the Sept 5th high. Three out of last week’s four trading days Silver increased or decreased over $0.65 per ounce. That is extraordinary volatility for Silver, as it hadn’t moved that much in a single day all year.

Surprisingly, the Silver-to-Gold ratio stayed around 83.65-to-1 last week. Silver has taken over the leadership role for the precious metal group, as its price increases and decreases are more substantial. I would like to see Silver stabilize in the $18 to $18.50 per ounce level for a bit, allowing the price to consolidate recent gains. However, recent trading history makes me believe that Silver is more vulnerable to a decline than Gold.

Today: Silver traded as low as $17.95 over the weekend in Asian markets. As Silver opened in the western markets it has been trading above and below the key $18 per ounce support level.

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