Gold and silver both made new weekly lows on Friday last week and then closed the day in the upper half of their ranges. This is a bullish sign and it occurred near the end of the current reversal zone for precious metals (that ends on Tuesday). We didn't see either metal break below its low from July 19 ($1212 in gold and $15.18 in silver) in the spot price charts for these metals; however, in the nearby contract charts, gold did break its July 19 low while silver did not so we could have a case of bullish divergence now. There are a few other short-term signals suggesting a rally is imminent, but we need to be careful here as volatility is high and instead of a reversal we could see prices break down further and fall into the next reversal zone for gold and silver coming up August 20 - 28. What we can do here is go long in gold (and hold off buying silver for now) with a stop loss (for gold) based on silver breaking its July 19 low ($15.18).
The U.S. Dollar Index may also be supporting the idea of a precious metal rally now. The dollar is currently up against a resistance line in the 95 - 95.5 area, and we are in the center of a reversal zone for currencies. If the dollar turns down now, it could kick-start a rally in gold and silver.
I am entering a long position in gold for tomorrow's market open (Monday).