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Gold Looking to Put LT Trend-line in Rearview Mirror, Silver to Follow

Gold Looking to Put LT Trend-line in Rearview Mirror, Silver to Follow

2017-06-07 08:33:00
Paul Robinson, Currency Strategist
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What’s inside:

  • Gold trading above 2011 trend-line, looking for it to maintain on a weekly closing basis
  • If it does – 2016 highs targeted, silver to follow
  • Silver trading in confines of bullish channel, July trend-line next up as resistance

What’s driving precious metals? Find out in our market forecasts.

What a difference a few days makes. This is what we had to say regarding the price of gold on Thursday: With gold currently trading right around this line [2011 trend-line], we’ll first respect it for what it is until broken –major resistance.”

Weaker than expected NFPs (+138k vs +182k exp.) undermined the US dollar, boosted precious metals. The resulting move in gold pushed it to just a shade above the 2011 trend-line to finish out last week. It’s a huge point of interest given how influential it’s been as resistance, especially in the past year. In light of the long-term nature of the trend-line, in our book, it’s about a decisive weekly close above the trend-line which is what’s needed to confirm as a true break. There is still plenty of time left in the week and events (ECB, UK election) which could ignite a move in either direction. But if we get that solid weekly close beyond the long-term hurdle by the close on Friday, then focus will shift towards seeing a move towards the 2016 highs to begin with. The April high around 1295 is another hurdle for gold to overcome (currently challenging it), but unlikely to present much of a problem as long as price stays above the 2011 trend-line.

Gold: Weekly

Gold Looking to Put LT Trend-line in Rearview Mirror, Silver to Follow

Daily

Gold Looking to Put LT Trend-line in Rearview Mirror, Silver to Follow

As we’ve been discussing, were operating off the technical landscape in gold for cues as to what to expect from silver. The picture hasn’t been as clear. But if gold is set to rise significantly silver won’t be left behind. Since bottoming in the early part of May, a channel has developed which is keeping the metal pointed higher. A noteworthy development. Silver has a trend-line of interest coming up not too much further above via a line running down off the July spike-high passing over the April peak.

Silver: Daily

Gold Looking to Put LT Trend-line in Rearview Mirror, Silver to Follow

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---Written by Paul Robinson, Market Analyst

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