What’s inside:
- Gold turns down from 2011 trend-line, support levels in view
- Silver takes the brunt of the punishment, trading near key trend-line
- Levels and trading considerations outlined
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As we said last week, our bias for silver prices largely hinged on gold and the 2011 trend-line it was struggling to overcome. In our book the macro ‘line-in-the-sand’ was to at least keep a lid on any advance precious metals might try and make. Gold has dropped off a bit from the key line of resistance, but silver experienced the brunt of the punishment between the two, falling back over 6% in less than two weeks.
Gold is trading very near support in the 1257/1260 vicinity, which may be enough to halt the pullback for another shot at breaking the 2011 trend-line. If it can’t get going soon, though, the 200-day at 1252 will comes into focus, but more importantly from where we sit, the trend-line rising up from the December trough is viewed as the bigger line of support.
Gold: Daily
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Silver is already very near its own December trend-line, and with that if gold doesn’t soon find a bid then neither is its sibling metal at an important line of support. Ideally, for a long trade we see gold hold and silver put in a reversal off trend-line support. If gold drops below noted support towards the December trend-line, a continuation short-trade may develop in silver towards a back-side test of the July trend-line, with no solid price support until the March swing low at 16.84.
Silver: Daily
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---Written by Paul Robinson, Market Analyst
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