A Victory For Gold & Silver Bulls

Posted by Sumit Roy - Hard Assets Investort

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As Prices Successfully Retest Cycle Lows For First Time

Fed tapering may already be priced in.

Gold and silver rebounded notably this week amid a combination of short covering and physical buying. Last week, gold and silver reached as low as $1,211 and $18.90, respectively—just above the cycle lows of $1,180 and $18 put in during July.

When prices failed to move any lower on Monday, shorts began covering their positions and buyers who had been waiting on the sidelines began to enter the market as well. Bulls should be encouraged by this first successful retest of the July cycle lows. It’s a positive first sign that the Fed’s upcoming tapering may already be priced into the market. 

The Federal Reserve may finally act—or at least hint that action is imminent—in its next meeting on Dec. 18. If precious metals shrug off the news, that may spark another round of short covering and physical buying that sends gold above $1,300 and toward $1,400. 










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