Gold and silver have been under constant selling pressure since the end of last year. Yesterday, gold fell to its lowest level since mid-December, and came close to testing the upper end of support around $2,010. Silver fell below $22.50 to hit its lowest level since mid-November. These sell-offs have coincided with a counter-trend rally in the dollar. Both metals fell after the hotter-than-expected CPI data which initially reduced the probability of the first Federal Reserve rate cut in nearly four years happening in March. But like US stock indices, gold and silver found support and bounced later in the day. Investors reassessed their initial reaction to the inflation update and found some positive news in the month-on-month decline in the annualised Core CPI data. Both precious metals continued to recover this morning and then shot higher following the release of today’s wholesale inflation numbers. Yet gold still hasn’t managed to trade back over $2,100 and given the pull-back in silver this afternoon, the metal looks vulnerable to another bout of selling. Precious metals could well put in a strong performance this year. But they may have to head lower first and find solid support for lift-off.