What’s inside:

  • Path of least resistance for silver price since September high is cleanly bearish
  • Both gold and silver have room to decline before finding solid support levels
  • Gold in the 1250/53 region has confluence of support which could provide a backdrop for a meaningful bounce

What will drive Gold this quarter? Check out our recently released Q4 Forecast.

We’ll start out with a look at gold before moving onto silver, given the substantial level of support which lies about $25 lower. The trend off the September 8 high has been clearly down, with only one meaningful bounce along the way lasting a whole two days. Otherwise, sellers have been firmly in control and we look for that to continue to be the case until reaching the confluence of support discussed in yesterday’s webinar. In the 1250/53 region lies the trend-line off the December low, 200-day MA, and minor price support as a result of a swing-low created in August. The $100+ drop into that level would put gold in an oversold state at solid support, a good combination for halting the decline. A rejection, should gold reach that juncture, would sweeten the deal from a tactical standpoint. But until then sellers have the upper hand.

Gold: Daily

Silver Price Lower Before Higher, Gold Support Down Near 1250

Silver doesn’t quite have the same nice neat confluence of support levels waiting for it below, but still has a pair of lows created which are in close alignment (May, August lows; 16.07, 16.13). Silver is postured no differently than gold since peaking on the 8th of September, and with that there continues to be reason to be bearish in the near-term. If silver reaches support at the same time as gold reaching the 1250/53 area then a nice confluence in time and support will have been achieved, but gold reaching its objective (and showing bullish price action) is viewed as the more important of the two in terms of watching for a tradable low in precious metals.

Paul conducts webinars Tuesday-Friday. See the Webinar Calendar for details, and the full line-up of upcoming live events.

Silver: Daily

Silver Price Lower Before Higher, Gold Support Down Near 1250

Heads up: Friday bring us the U.S. jobs report at 12:30 GMT, which could certainly shake up the near-term outlook in markets. For details regarding data point specifics, please see the economic calendar. You can join my colleague, Christopher Vecchio, for live coverage and analysis of the release, beginning at 12:15 GMT.

---Written by Paul Robinson, Market Analyst

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