- Silver’s engulfing bar on Monday puts pressure on the metal as long as it stays below 17.46
- Gold shift lower puts sellers in control as long as the recent swing-high is maintained
- Silver targeting support around 16.33/07, gold looking towards support near 1260
What will drive Gold this quarter? Check out our Q4 Forecast for our outlook.
Precious metals got a nice lift on Friday, marking the 6th consecutive up-day, with the help of poor U.S. economic data, weaker dollar. But since then a lot has changed already with Monday’s selloff setting in motion downside momentum, and in the case of silver prices a bearish engulfing day formed to start the week.
Silver to end last week took out an area of resistance we viewed as important in the low-17s; it comes by way of horizontal prices back to August along with the 200-day MA. But with Monday’s sudden reversal we are already seeing sellers step up in earnest as the metal drops back below the low-17s. Staying below the recent swing-high at 17.46 should keep the pressure on. The recent swing-low at 16.33 is eyed as a potential target, along with the 16.07/13-area.
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The six-day rally took gold up beyond resistance we had penciled in around 1296/300, but it was a brief stay as Monday selling quickly pushed momentum into reverse. Stay below 1306 and focus will continue to be on gold trading down to the trend-line from December, 200-day MA. These two levels could be in confluence with the earlier-month low at 1261.
---Written by Paul Robinson, Market Analyst
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