Precious metals perk up

Precious metals had a tremendous start to the week. Gold and silver flew higher in early trade yesterday in moves which saw gold push back above $2,650. Silver broke above $32 per ounce to hit its best level in over a month. Unfortunately, silver was unable to build on this move. It subsequently pulled back from its highs, although it still rallied over 2.5% on the day. Gold’s gains were less dramatic, and it also dropped back from its best levels. But it has made further upside progress this morning in a move which looks very encouraging from a bullish perspective. Gold is back above its 20 and 50-day moving averages. At the same time, the daily MACD, while still in negative territory, has started to tick upwards. The bulls will be hoping that this upside momentum builds further and helps to push prices back above $2,700 relatively quickly. If so, this will represent an impressive recovery from the lows hit less than a month ago. But the bulls will also want gold to hold $2,600 as support on any pullbacks. Silver needs to get back over $32 and then hold above here on a sustained basis.