Gold & Silver Pop on Fed, USD Tank; Charts Need More Work for Clarity
Gold/silver technical highlights:
- Gold has room for short-term momentum, but 2013 trend-line remains problematic
- Silver trading at trend-line resistance, broader outlook remains uncertain
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Gold has room for short-term momentum, but 2013 trend-line remains problematic
Yesterday, post-FOMC the US dollar tanked while precious metals rallied sharply. After holding support earlier this week near 1300, the boost has gold in position for short-term follow-through, but that could be quickly stymied if sellers show up again around the 2013 trend-line.
Start watching how any follow-through maintains should it start trading up into the 1340/60 zone. This could quickly become another reversal point as it has on other occasions since January. To provide full clearance for longs, a weekly close is needed beyond the long-term threshold. On a drop back lower, the low-1300s continues to be a major area of support.
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Gold Daily Chart
Gold Weekly Chart (2013 trend-line standing in the way)
Silver trading at trend-line resistance, broader outlook remains uncertain
The pop in silver yesterday puts it right back in the thick of a trading range that started during the early part of last month. It’s also trading around the trend-line from the January high. Silver may continue yesterday’s rally, but faces a lot of resistance from 16.75 up to 17, consisting of not only price resistance, but also the 200-day MA.
While buying the rally with resistance so close isn’t particularly appealing, shorting doesn’t hold much of an edge either with potential for short-term momentum to carry it a little higher. The side-line looks like the most attractive place to be right now.
Silver Daily 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.