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Silver Struggling at Resistance, Gold on the Verge of Breaking Support

Silver Struggling at Resistance, Gold on the Verge of Breaking Support

Paul Robinson, Strategist

What’s inside:

  • Silver price struggling to overcome 18.50, needs to hold channel support to keep bullish bias
  • Gold on the verge of breaking a confluence of support
  • Levels and lines of interest outlined

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The other day we described silver as ‘squaring off with notable resistance’, and that it would need to overcome ~18.50 to move towards the larger target of 19. We are seeing a bit of stalling here, but no selling pressure as of yet. For now, we will continue to focus on the channel it has risen higher in over the course of the past month. But, if silver is unable to continue through 18.50 and trades below the lower parallel, then stepping away from the long-side looks like a prudent move, and turning towards shorts may become the way to go. On a break, we will look to 17.84 and then the December trend-line as the next likely levels (depending on timing they could arrive at the same price).

Silver: Daily

Created with TradingView

Which brings us to gold…

Gold broke higher recently out of a triangle formation, but found resistance at a trendline extending back to August; it's now coming off with a bit of momentum. The down-move is exposing the trend-line off the December low, horizontal support, as well as a potential reversal (break of the lower-trendline) of the triangle it recently traded up from. All three of these events arrive at the same point; meaning a close below this confluence of support will likely lead to further, if not accelerated, losses. On a break, the first level of minor support comes in at 1226, with more significant support arriving around 1217. If this happens, then it is likely the neat channel silver has maintained will be compromised, and lower we go. Of course all levels could hold, and so would a bearish bias, for now.

Gold: Daily

Created with TradingView

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---Written by Paul Robinson, Market Analyst

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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

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