Now that gold has managed two consecutive closes at roughly $1,840, we can look at $1,830 as a good support level. A minor dip or correction must hold above $1,830 on a closing basis for this rally to continue. It’s no coincidence that gold has had a very strong rally while stocks have had a really bad week. Gold has been unable to find its legs recently, despite all this inflation. I caution you to closely monitor “outside” markets. If we continue to see weakness in stocks, we should continue to see strength in precious metals. The money has to go somewhere! Gold prices must be able to penetrate $1,850 and hold several closes above $1,850 before I get more confident about this rally. I think a bottom is in, but I’m not convinced that gold doesn’t move back to that sideways range.

Silver may assume a leadership role in this precious metal rally, as silver is in my opinion, severely undervalued. Even more so than gold. All precious metals are undervalued.