Gold and silver are showing encouraging price action today, while crude oil is down more than 4.5% and equity markets are rallying strongly. Both metals are holding firm and forming a base and attempting to move higher.

Over the past several weeks, we've seen a healthy amount of position liquidation and profit-taking. Much of the speculative excess has been worked off, allowing the market to consolidate after a strong advance. While the day-to-day price action has been frustrating at times, this type of consolidation is often a necessary process before a market can establish its next sustainable move higher.

I've said it many times: markets driven by geopolitical headlines are notoriously volatile, producing sharp intraday swings and frequent reversals. Trying to trade every headline is extremely difficult. Instead, I prefer to let the market reveal its direction.

If the geopolitical backdrop begins to stabilize and the uncertainty surrounding the Iran crisis continues to ease, I believe investors will increasingly refocus on the longer-term fundamentals. Those fundamentals remain compelling: continued central bank buying, ongoing geopolitical uncertainty, persistent fiscal deficits, and what I still believe is a meaningful under-allocation to precious metals by many investors.

One day doesn't establish a new trend, but today's price action is constructive. After several weeks of consolidation, it feels like the market is becoming more comfortable building a base for its next move.

As always, stay disciplined, stay informed, and don't lose sight of the bigger picture.

#Gold, #Silver #USD