Gold and silver at last staged the expected correction necessary to unwind the extremely overbought condition that had persisted for weeks. Once the correction started we had figured it would take gold down to about $1300, probably with a 3-wave movement, and although it did drop to about $1316 at its lowest point intraday, the bullish action late last week makes a return to the $1300 area much less likely. However, as it looks too early to start another upleg to new highs at this point, what is thought likely to happen now is that a trading range develops over the next 2 or 3 weeks between the lows of about a week ago and the highs, with a lower probability of a third wave drop below the lows of a week ago. Such a trading range will serve to further unwind the medium-term overbought condition and also accords with the bullish implications of the action late last week.