Gold bulls finally managed to beat back the line of defense erected by the perma shorts at the Comex in today’s session as safe haven buying came into gold from all quarters early in the session and continued to build as it wore on. The technical breakout above resistance also brought in both short covering and new momentum based buying.
Volume on the upside move has been very good which is generally regarded as confirmation to the validity of the breakout.
The next technical target lies near the $1720 level.
Downside support now moves up towards $1680 with much better support near $1650.
Helping confirm the move is the surge in both the mining shares as evidenced by the HUI and the upside breakout above $32.50 in Silver.
Note on the silver chart that the market is currently up against the 50% retracement level of the most recent leg down. Clearing this should allow it push first towards $34 and then up against the $35.15 – $35.25 level.
Downside support levels are first near $31 and then back down towards $30.