Gold fell to a 10-month low when it traded to 1526.70 on Wednesday of this past week. As traders watched the European Union's sovereign debt crisis deepen, investment dollars rushed into U.S. treasuries and we witnessed the American dollar surge in value. However, Wednesday afternoon, the FOMC minutes hinted that the Federal Reserve might just need to initiate more stimulus and another round of quantitative easing: EQ3.
The combined E.U. and U.S. factors became the tinderbox that would ignite the precious metals markets, moving them off of their lows to begin to trade substantially higher. What we witnessed on Thursday and today might later be seen as a key reversal in the precious metals markets, and a potential bottom for gold and silver prices. This week we spoke about key support areas as both gold and silver traded to recent lows in the marketplace. The combination of factors cited above created a triple punch, in essence halting the strong corrective selling pressure that we have seen in gold and silver. I currently believe that next week should be a bullish one for the precious metals and we will see higher gold and silver prices.
Source:The Gold Forecast