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Silver Price Reverses off Confluence of Resistance, Gold at a Big Spot

Silver Price Reverses off Confluence of Resistance, Gold at a Big Spot

What’s inside:

  • Silver rallies to confluence of horizontal and trend-line resistance
  • Key reversal yesterday at intersection shows sellers willingness
  • Gold at a very important long-term threshold, should prove formidable

Find out in our Q3 Forecast what risks Precious Metals face in the months ahead.

This is from Tuesday’s commentary, “If momentum doesn’t turn lower from around current levels, we’ll then look to the trend-line off the April peak and/or a swing-high which developed in late-June.” Yesterday, the trend-line and late-June swing-high were in confluence, and sellers emerged upon silver’s arrival at the cross-road. There was another line of influence in the vicinity from May, but we’re mostly interested in the trend-line, swing-high. The rejection from a confluence of resistance is the type of price action we like to see. The key reversal day smacked of one of the candlesticks discussed in yesterday’s candlestick trading webinar (You can check it out here.)

From here if silver is to turn the tables on buyers it should start doing so soon. Price shouldn’t close above yesterday’s high if we are to see a decline get underway. If we see a strong breach then the rally off this month’s low could grow legs towards the 200-day (17.15) or higher. But if we see sellers step up in earnest another low high (LH) could be in place and a move to sub-15 could unfold. As we’ve discussed throughout this currently-viewed correction is that our expectation is for silver to trade down to the trend-line rising up from 2003.

Silver: Daily

It doesn’t hurt a bearish thesis from here that gold is trading back at a very, very important long-term trend-line. The 2011 trend-line has been highly influential for a little over a year and if gold is to turn back lower then this is the area to look for it to do so…

Gold: Weekly

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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.