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Gold/Silver Highlights:

  • Gold neared 2013 trend-line again, to remain burdensome until crossed
  • Silver keeps finding swaths of sellers in 16.80/17 zone
  • DXY bullish potential could keep precious metal sellers in control

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Gold neared 2013 trend-line again, to remain burdensome until crossed

Yesterday, gold came close to the 2013 trend-line (in addition to the underside of the December trend-line) and again was swatted back lower. If the bounce dating back to last week is over on yesterday’s turnabout, then the technical posturing is weakening as lower highs are becoming visible since the peak in January.

There is still good support down near 1300, which was last evident with the reversal bar etched out on March 1. With lower-highs potentially in place, a break below 1300 would likely have the 200-day and December 2016 trend-line in focus as targeted objectives.

Getting back to the 2013 trend-line. As long as price stays beneath on a weekly closing basis it will continue to be a point of interest for sellers. It’s a ‘line-in-the-sand’ with much influence.

To see how traders are positioned in gold and other key markets, check out the IG Client Sentiment page.

Gold Weekly Chart

gold weekly price chart with 2013 trend-line resistance

Gold Daily Chart

gold daily price chart

Silver keeps finding swaths of sellers in 16.80/17 zone

Silver is the weaker of the two major precious metals, it has been for a while and looks set to continue to be so even though futures market positioning suggests that may soon change. Positioning is positioning, price action is price action. The latter factor viewed as the most important until the former corroborates.

The 16.80/17 zone, where the 200-day conveniently runs through, has been a problematic spot for silver. As long as it stays below, then the outlook is neutral at best. Price is currently sitting on a pierced trend-line from December, but it isn’t particularly strong as support. A clean break through 16.17 will have eyes set on the trend-line rising up from the July spike-low, and with momentum the December low at 15.62.

Silver Daily Chart

silver daily price chart with 16.80/17 resistance

DXY bullish potential could keep precious metal sellers in control

In last week’s piece we noted the burdensome strength of the US dollar, and to quote from the commentary, “even if DXY pulls back a bit from here the outlook can still remain constructive.” A view which we’ll stick to as a higher-low may soon carve itself out after double-bottoming.

It will need to trade back above the under-side trend-line from 2015 and last week’s high (near the September low) to get further traction, but if it does then more upside could be in store and that is likely to make the already bearish-looking price action in precious metals look even more bearish.

US Dollar Index (DXY) Daily Chart

us dollar index (dxy) daily price chart with higher-low scenario

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---Written by Paul Robinson, Market Analyst

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