A tremble in the metals market

Today's sharp morning sell off in the metals market gave a fair few metal-bugs a bit of a scare. Sure, the drop was only a few percent, but it was a useful reminder that when the metals snap lower, they do so fast, and hard.


GLD, daily

SLV, daily

Summary

The daily cycle is clearly VERY toppy for silver and gold, and I'd expect near term sharp declines. Those could easily come AFTER the FOMC announcement tomorrow.

With the weekly and monthly cycles now pointing upward though, the original lower targets of $1300 and $20 for Gold/Silver respectively look out of reach, baring a major deflationary wave - despite any further QE.
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So, near term weakness still looks due, but if both Gold and Silver can put in higher lows, then a continued ramp to the February 2012 highs seems at least likely within the next few months.