[Following are excerpts from the current issue of the Weekend Update at Iacono Research. By the way, the new combined investment website/blog will launch in the next week or so and, as part of that process, subscription rates will be going up considerably, so, if you're thinking of subscribing, sooner would be better than later - the link is here.]

Gold and silver prices picked up where they left off in January, surging again after a three week pause on optimism that a messy debt default in Greece will be avoided, heightened tension in the Middle East, and a weaker trade-weighted dollar as bullish technical factors triggered hedge fund buying, most analysts now predicting even higher prices ahead.

For the week, the gold price surged nearly $50 an ounce (or 2.9 percent), from $1,723.80 an ounce to $1,773.60, and the silver price jumped 6.4 percent, from $33.28 an ounce to $35.41. Gold is now up 13.2 percent for the year, but down 7.7 percent from its high last year, and the silver price has gained 27.1 percent so far in 2012, now down 28.4 percent from its peak last spring.

Silver reached a five-month high at $35.70 an ounce on Friday after piercing through its 200-day moving average the day before (as indicated in red in the one-year silver chart below) and, while some analysts think it is now vulnerable to profit taking, others think this sets the stage for another assault on the $40 an ounce level, last seen in early-September prior to the vicious sell-off that affected nearly all asset classes.

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[Following are excerpts from the current issue of the Weekend Update at Iacono Research.]

After marching steadily higher early in the week, gold and silver saw their biggest one-day losses in more than a month on Friday as hopes for more Fed money printing were dashed after the better-than-expected labor report. Still, both metals maintain impressive gains for 2012 after a disappointing end to 2011 as more attention is focused on demand in China and actions by central banks, two of the most important price drivers in recent months.

After rising above $1,760 an ounce for the first time since November, the spot gold price ended the week 0.7 percent lower, down from $1,737.30 an ounce to $1,725.90, as the silver price surged past the $34 mark before reversing course, ending the week down 0.9 percent, from $33.99 an ounce to $33.67. The gold price is now up 10.2 percent for the year, but down 10.3 percent from its 2011 high, and silver has risen 20.8 percent in 2012, down 32.0 percent from its peak last spring.

We’ll find out soon enough if Friday’s sell-off was anything more than a one-day event.

Clearly, there have been many good reasons for the price of precious metals to head higher over the last month – demand from China, loosening monetary policy by central banks, and increased gold purchases by central banks topping that list – and many technical analysts have been shocked by the ease which previous resistance levels have so quickly been surpassed and now function as support. Up until Friday, technical factors were unquestionably positive, but, with the late-week reversal, some now argue that the metals have come too far, too fast and the Friday correction will continue.

[To continue reading this story, please visit Seeking Alpha.]

[Following are excerpts from the current issue of the Weekend Update at Iacono Research.]

Aided by a surging trade-weighted dollar on Thursday and Friday when the European sovereign debt crisis took yet another turn for the worse, both gold and silver saw steep declines last week, the former experiencing its sharpest drop since the broad sell off during the first week in May, but both metals still cling to impressive gains in 2011 as other asset classes falter.

For the week, gold on the spot market dropped 2.4 percent, from $1,540.00 an ounce to $1,502.30, and silver fell 4.4 percent, from $35.90 an ounce to $34.32. For the year, gold is now up 5.7 percent and silver has gained 11.0 percent.

With last week’s decline, both metals are now at the lower end of the trading range that they’ve settled into since plunging from the late-April highs and technical analysts are increasingly talking about a developing “triangle” pattern that usually resolves itself with a big move up or down, the direction uncertain.

At times like this, when the next $100 move for gold and the next $5 move for silver could go either way, given the already lofty price and growing uncertainties in the world, it makes good sense to me to remain comfortably sitting on the sidelines with core long-term positions that are not intended to be sold until prices go much, much higher and with ample cash to take advantage of any buying opportunities that might arise.

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