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.



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.



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