There are several variables influencing the markets today including a speech to be given by Ben Bernanke later in the afternoon around 3:30 pm. Investors seem to be debating the meaning of today's conflicting jobs report that showed many more jobs yet a higher unemployment rate and a very low consumer-sentiment index. So far, the DOW likes the news (but Mr. Bernanke hasn't spoken yet). I will analyze and discuss the markets in a little more detail later this weekend, but I want to post some short comments before the markets close for the benefit of traders who may be anxious about the lower prices in gold and silver today.
I am not making any changes to trade positions today (we are out of the broad stock market and crude oil and still long in gold and silver). Precious metal prices are now challenging our stop loss areas, and normally this would be a signal to bail out of long positions. However, as I mentioned in my last blog, the first half of next week is a time zone when strong market reversals can occur, and gold and silver are now moving down into it. Even though gold has broken through the $1300 level, there is still a strong zone of support down to at least $1200. Silver is also approaching its next support level just above $21. Momentum in both metals has not changed and is very bullish in silver and mixed bullish and bearish in gold. Gold and silver mining company stock indices are also unchanged and are reflecting this same momentum (mostly bullish). For these reasons I am staying long in the metals today. In terms of short-term cycles, a critical support area for gold is now at $1250 and for silver at $20.50. Any close below those levels would be a strongly bearish signal (short-term).