As expected (I thought it might happen next week, but its come sooner than I thought) both Gold (GLD) ETF and Silver (SLV) ETF have worked off a steep decline, and now are in process of their cursory bounce into resistance levels. [these are the ETFs and not the metal themselves, but they do a good job of tracking the actual metal prices] As with the dollar, which rallied into resistance than fell back, it will be interesting to see which way the computers take these precious metals.
If this is part of a larger move down, both ETFs will face a stone wall and resume their near term move downward. If the strong dollar move is over, and we simply experienced a very quick this trade got far too crowded, hence a shake out was in order moment, the metals should burst through resistance and we'll be back to the intermediate/longer term trends. We should know in the coming week.
To have a margin of safety, we'd probably want to see the GLD ETF over $112 and SLV ETF over $17.50 to assume the bullish conditions are back.
Long Ultra Silver, Powershares DB Long Double Gold in fund; no personal position