Gold/Silver technical highlights:
- Gold running lower into big long-term support, underside of wedge
- Silver breaking out of a triangle, 2003 trend-line in view
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Gold running lower into big long-term support, underside of wedge
The move lower in gold hasn't disappointed with its impressive momentum after an extended period of choppy trading. A crossroad is nearing as price continues to unravel, with the December 2015 trend-line less than 10 handles or so below. This line also constitutes the underside of a long-term wedge.
In relative confluence with the December 2015 trend-line is the low from December. This could make for a spot where price action becomes volatile as an oversold market meets major support. The thinking on this end, is that at the least a bounce develops, even if gold is to eventually continue trending lower.
Gold Weekly Chart (Long-term Wedge)
Gold Daily Chart (Big trend-line coming up)
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Silver breaking out of a triangle, 2003 trend-line in view
During the past couple of sessions silver slipped below trend-line support from July of last year, which also makes up the bottom of a wedge under construction for just as long. The break of the wedge on a weekly chart has silver geared up for more weakness, but selling may be curtailed by the fact that an even more important long-term trend-line rising up from 2003 isn’t too far below.
In confluence with the 15-year trend-line is the low from December. From a tactical standpoint, there is more room to go for shorts before support is met, but a big bounce may ensue once reached. At this time, the long-term trend-line is not necessarily a great spot to establish a fresh long, but is reason to be cautious on existing bearish wagers once met.
Silver Daily Chart (Triangle broken, 2003 trend-line in focus)
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---Written by Paul Robinson, Market Analyst
You can follow Paul on Twitter at @PaulRobinsonFX
