Today, precious metals investors, including myself, had to endure a bit of pain as gold and silver experienced some profit taking. What is important now is to determine what we can expect from here on in. In my opinion, there was no technical damage to any of the precious metals charts today.
The daily silver chart, for example, is above three layers of support, which, coincidentally, are all in the same area:
The first support level is derived from the blue trend line. This line was resistance until the point that silver gapped above it. This old resistance line now becomes support.
The second support level comes from the 200 day moving average. I know for a fact that many traders place limit buy orders right on this level, which sometimes causes prices to bounce off this psychologically important level.
The third level of support originates from the gap itself. On one of the posts I made on the weekend, I drew a blue rectangle to illustrate that silver would find support in this gap area in the event of a correction.
In summary, therefore, I would say that at this time, the precious metals charts have not broken any major areas of support. If silver continues lower tomorrow, and breaks these levels of support, then I think that would justify taking profits and standing aside until the next wave higher inevitably comes about.