Gold makes upside progress
Gold ended last week on a positive note, posting decent gains on both Thursday and Friday. This ended a six day run of negative closes, and also established a new area of support just above $2,600. The bulls need to build on these gains now in an effort to push gold up to $2,700 and fresh all-time highs. They should get some help from the daily MACD which has pulled back from overbought levels, giving more room for upside momentum to build from here. The bulls should also get some encouragement from the fact that last week’s pullback was quite gentle and restrained, rather than being one of those sharp, aggressive sell-offs that have been such a feature of this market since April. That’s not to say that can’t happen again, but it’s possible any downside may be limited by support around $2,600. Silver is proving more erratic. Despite several serious attempts over the past three weeks, it has failed to hold above $32 per ounce so far on any rally. The first line of support comes in at $30, and then $28. But a break below here could see silver retest its lows from early August, just north of $26. If so, that would be a real test of bullish resolve.
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