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Silver Price Rallies Back to Resistance, Watch Gold as it Nears 2011 Trend-line

Silver Price Rallies Back to Resistance, Watch Gold as it Nears 2011 Trend-line

Paul Robinson,

What’s inside:

  • Silver doesn’t follow through on Friday’s sharp move lower, but still at resistance
  • Gold running towards 2011 trend-line
  • Trade scenario outlined

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On Monday, we viewed the big reversal day from Friday to be damaging, and that lower prices were likely in the cards. Lower prices lasted for about one day. Yesterday, precious metals exploded higher with gold pressing towards the long-term 2011 trend-line. Silver, however, is still contending with the same resistance it was last week. It is currently trading around the trend-line running down off the November peak, highs from 2/27-3/1, and Friday’s reversal day. It is relatively weak compared to gold. Looking to gold, if it can continue higher to the 2011 trend-line, which at this time nothing stands in its way of it doing so, we would look for that to be a capper on gold, for a short-while at least, as well as silver.

Gold: Weekly

Created with TradingView

Ideally, for those looking to take a short in silver it would play out something like this; gold rallies to the 2011 trend-line (~1286), and silver continues to hold under resistance. Not only would silver continue to exhibit relative weakness, it would also be trading at a level of resistance. At this time, of course, that is only a scenario, but one we’ll be keeping an eye on in the coming days. If silver is able to clear the 2/27 high of 18.48 then a push towards the November spike high at 18.99 may develop.

Silver: Daily

Created with TradingView

Heads up: Friday is a holiday (Good Friday) and most major global equity markets will be closed along with commodity futures trading thinly in an abbreviated session. With that in mind, tomorrow will mark the last true day of trading for the week.

Looking for a longer-term outlook for precious metals – Check out our Q2 Forecast.

---Written by Paul Robinson, Market Analyst

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You can follow Paul on Twitter at @PaulRobinonFX.

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

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