Silver pulling gold higher

Yesterday saw gold push back above the significant $2,000 level. It was helped along by the weak retail sales number which weighed on the dollar, and caused a pull-back in bond yields. There were concerns that Tuesday’s break below support at $2,000 would trigger further selling which would knock the stuffing out of the gold bulls for months to come. But they will be encouraged by yesterday’s price action, particularly as there has been some follow-through this morning. The situation looks even better as European markets close. Having said that, gold must build on these gains and put some clear water between it and support. The situation with silver may offer the bulls further encouragement. Having broken below $22 on Tuesday, following the horrible CPI numbers, and falling further on Wednesday morning, silver suddenly reversed direction. It has broken back above $23. If it can also build on these gains, then take out resistance around $23.50 (red line above) and hold, then the likelihood of further gains for both precious metals will start to improve. As the chart above shows, the MACD is starting to turn up.