Gold blasts through 1,343.70 resistance. Target now 1,427.

FXstreet.com (Barcelona) - Gold and silver exploded to new short-term highs Thursday during the US trading hours – obviously in reaction to the tumbling US Dollar. How long will the rally last?

Gold bugs growing bolder while gold bears are on the run

On a short-term basis, gold is in full bull mode and is likely to stay in that mode for a bit longer. The DXY’s sharp decline took an already-promising short-term chart and turned the knob up to “face-ripping” mode. Anyone who was short already or starting new shorts Wednesday and early Thursday with the idea that resistance at 1343.70 could be a backstop or that the reward/risk on the trade was favorable found out quickly that the best laid plans can sometimes be all for naught.

While gold was doing a number on its naysayers, silver brought the hammer down on its bearish cabal more than twice as hard. Gold was up an impressive 2.06%, but silver made that gain look paltry by posting a 5.45% gain for the session.

Technical outlook for gold and silver

Both of the precious metals are consolidating the big Thursday gains early in the Friday session. However, based on the thrust pattern that played out Thursday, traders should expect even more upside in the very near future according to technicians monitoring the situation. The next upside target for gold is the 1,394 – 1,408 range based on Fibonacci projections. The key resistance won’t come into play until 1,427, though. For silver, the next stop on the upside may be 23.43 – but that chart appears to have plenty of room to the upside once a small consolidation plays out.

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