Why Gold, Silver Rallied Today, And Where To From Here
(Kitco News) - Some market watchers are scratching their heads at thebig upside price moves in gold and silver markets Wednesday. What was the maindriving force for the strong prices gains? Was it the depreciation of the U.S. dollar index this week? Was it a re-examination of the U.S. consumer priceindex report that may not be as indicative of problematic inflation asinitially thought? Or, was it a high-volatility day in the U.S. stock indexestoday that rekindled notions the stock market still has some rough days ahead,which produced some safe-haven demand for gold? Likely, it was all of the abovefactors that contributed in varying degrees to the rally in the precious metalsmarkets today.
The surprising gains in gold and silver triggeredpre-placed buy stop orders in their futures markets, which sent prices evenhigher during the trading session. Also, the weak-handed shorts in the futuresmarkets were forced to cover their bets today, pushing prices still higher.
What's more important is where gold and silver prices areheaded from here. With today's infusion of needed technical strength in themetals, more gains are likely in the near term, if not longer. Gold's nextupside near-term target is the January high of $1,370.50. Gold's nextlonger-term upside price objective is the 2016 high of $1,377.50. Silver's next upside technical target is theJanuary high of $17.555. Silver's longer-term upside objective is $18.64. Allof these price targets are now within striking distance in the coming days, orfew weeks. Stay tuned!
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jwyckoff@kitco.comwww.kitco.com Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.