Are Precious Metals Holding These Key Support Areas?

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Recently, there has been an increased amount of focus on gold and silver.  Last week, gold closed 3.5% lower, while silver lost 6.5%.  On Monday, the struggles continued as gold fell $46 to settle under $1,700 and silver dropped $1.30 to close near $31.

Looking at the chart below, it will be important for gold to hold $1,680.  In the past, this price level has acted as overhead resistance as well as downside support.  If gold fails to maintain the $1,680 level, the price could easily fall to $1,600-$1,650 in the short-term.  A sustained rebound above $1,700 will be very encouraging for gold bulls.

For silver, the critical support range is $30-$31.  Recently, silver has attracted buyers at these levels.  If a silver pullback fails to attract buyers here, then silver could decline to $27.50 before finding support.

On Tuesday, shares of the SPDR Gold Trust (NYSEARCA:GLD) are up over 1%, while the iShares Silver Trust (NYSEARCA:SLV) is jumping more than 3%.  The precious metals (NYSEARCA:DBP) received a boost after the IMF approved a credit line program designed to provide liquidity to the euro zone.

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