Gold Breaks Down Below The July Lows

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Gold breaks to two-month lows in Thursday’s trade on the first chart. We have a major horizontal support and resistance area on the gold chart shown in red. Gold pulled down to test that support level. It is also the uptrend support line. This is a very important place for gold to hold, especially with the strength of the USD. Gold is still up $60 from the start of the year. Based on the USD strength and the positive correlation of Gold to the Swiss Franc, there are a few clues that should line up if $GOLD is about to turn to the upside here. One being dollar weakness or at least strength in the Swiss currency in sympathy with Gold, the next being a similar turn higher in silver and we would like to see the gold stocks start to outperform the metal again.

gold_price_daily_22_august_2014

 

Silver also pulled back today on the chart below. The price movement in Silver looks very contained with a continual drip lower and it did not have the big thrust down like Gold did today. While Silver is also at 2 month lows, it was a slow drip for Silver and a sudden thrust for Gold. Silver is in an area of horizontal support for the next $0.75 down.

silver_price_daily_22_august_2014

 

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