Precious Metals Update

Gold's pullback off 659.80 Friday's high to 643.50 low hints that the overbought indicator may finally be exerting pressure, as the rally off 602.20 Jan 5 low completes its 5-waves up-leg.

Expect a likely break of 643.50 which will risk 639.25 Jan 24 low ahead of 633.70 Jan 23 low.

Meanwhile, 652.20/659.80 resistance zone should cap and only a breach there bodes well for extension over 661.30 ahead of 676.35, Jul 2006 high.

Silver is retreating from 13.780 last Thursday's high as overbought momentum look to unwind lower.

Ahead of tough barrier at 13.845, Dec 15, 2006 high and 14.195, Dec 5, 2006 key top, expect further dips below 13.250 last Friday's low, preceding deeper fall to 13.090, Tuesday's low and 12.775, Jan 22 low.