As we wrote yesterday, gold has been in this tight range and all signs were pointing to a breakout to the upside. This morning, it is tacking on to yesterday’s gains. The key level is now $1,312; a close above would bring us to our next target of $1,330.
Fed officials reported on Wednesday and did the usual stick their heads in the sand, hiking rates 0.25 percentage point and indicating two more hikes this year. The ECB is next and reports this morning; the announcement should also help buoy the prices of gold and silver.
It appears that all of the bad news for the metals has been priced into the market and the bottoms are in. We would expect a solid rally from these levels and a run to the next resistance levels. The probabilities favor a continuation of the rally that began on May 21 after the blow-off bottoms.