Both gold and silver are nearing a resistance line and it looks like a strong selling point unless the US dollar lends a helping hand by continuing its decent. I admit that I am not an expert on currencies, hence I don't have a strong enough conviction on which to make a prediction as to what will happen to the dollar. The basics support a further drop in the dollar, but as the previous months have shown us, a fundamental weakness in the dollar might not be enough to materialize into actual losses.
One of the reasons was a flight to safety (purchase of US government bonds due to the fact that other economies/currencies were doing even worse), but some "credit" has to be given to the chairman of the Federal Reserve, Mr. Bernanke.
In the end, You just have to figure out how to put those factors into work for you so that the next time they make an announcement, you will know how to react. One important thing to keep your eye on is quantitative easing. The next FOMC meeting release is due in June.
Right now, keep your eyes fixed on the dollar. If it shows any signs of long term weakness, silver and gold will definitely benefit. But you will also have to take into account the resistance lines.
- support at $12.50
- resistance at $14.60
- support at $900
- resistance at $930