The good news is that the bulls managed a second day of decent gains. The bad news is that it looks like we are developing a great set up for shorts. The fact that many are ready to proclaim the worst is over and the economy really isn't bad doesn't help either.
The bulls are obviously anticipating something positive from Fed Chairman Ben Bernanke when he speaks on Friday and that is also contributing to nervousness in the precious metals group. Dr. Bernanke is going to move metals and the markets one way or the other, and many folks with big recent gains in gold and silver are going to step aside until that event is over.
It will be interesting to see if the bulls continue to push into the Bernanke speech. You have to be thinking at least a little bit about a possible sell-the-news reaction, especially if there is no QE3 or some variation announced. This market wants endless support from the Fed, regardless of the outcome, and if Bernanke doesn’t give the bulls a bone they will not be happy.