Gold Rally Could Grow Legs on Long-term Trend-line Break, Silver to Follow
- Gold threatening to break key long-term trend-line
- Weekly close above will be needed to qualify as a sound breakout
- Silver has resistance, but will follow gold
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Gold threatening to break key long-term trend-line
Late last month, gold was rejected from the 2013 trend-line in fairly swift fashion. This warranted a neutral to bearish outlook on the precious metal since, but with yesterday’s surge the trend-line is under fire again.
There remains time on the clock before the week concludes, so gold may yet prove to falter again at this big threshold, but if it can close the week firmly above, preferably above 1366 too, a broader advance could get underway.
There are levels not far beyond which could be problematic, but with the long-term trend-line in the rear-view mirror it seems likely there will be enough momentum to carry gold through 1375 to 1400 and higher. A turn back down around current levels would keep a bullish bias at bay.
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Gold Weekly Chart
Silver has resistance to clear, but will follow gold
Silver has been the laggard of the two major precious metals, but if gold breaks beyond the aforementioned threshold it will likely take out its own set of resistance levels. There is a trend-line from the July spike-high to first hurdle, then 17.70 before momentum is seen to carry silver to higher ground. Big-picture, silver has been coiling up since 2016 (between ‘03/’16 trend-lines), implying a big move could soon be near.
It’s all about gold for now, though, if it can’t clear on a weekly closing basis then we’ll have to tap the brake on an upward bias. Should gold get rejected again from the 2013 trend-line look for silver to continue as a leader on the downside.
Silver Weekly Chart
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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.