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Gold/Silver technical highlights:

  • Gold weakness may offer dip-trip opportunity for larger bounce
  • 2015 trend-line, December low are important for a bullish outlook
  • Silver has a less favorable set-up given where it’s situated

To see our intermediate-term technical outlook and expected fundamental drivers in the months ahead, check out the recently released DailyFX Q3 Gold Forecast.

Gold weakness may offer dip-trip opportunity for larger bounce

Last week, gold found sponsorship at the December 2015 trend-line and just above the December low, carving out a bullish key-reversal on the weekly chart. The past few sessions have brought some weakness and with it also the prospects of posting a higher low for another upward thrust.

To keep this outlook intact, a higher low needs to form above the recent low and preferably at or above the 2015 trend-line. A break below trend support and the low from December at 1236 will have any thoughts of a recovery off the table.

Even though a larger rebound could be in the works, expectations aren’t for a rally to be all that vigorous. First up as resistance is the weekly high at 1266, followed by the upper parallel of the channel off the April peak. To add conviction to a bullish bias, a break of the bearish channel will be needed.

Looking for ideas to strengthen your confidence? We’ve designed a guide with 4 key tenets which can help you start Building Confidence in Trading today.

Gold Weekly Chart (Bullish reversal)

Gold weekly chart with bullish reversal

Gold Daily Chart (Looking for higher low to develop)

Gold daily chart with possibility for a higher low around support

Silver has a less favorable set-up given where it’s situated

Silver isn’t situated for a recovery in the same manner gold is; that is, it doesn’t have the same type of strong support at its feet. It’s caught between a triangle break (July ’17 trend-line) and a very long-term trend-line (2003-present). This makes for a bit of a tricky spot and as a result has gold in the spotlight for now.

A bounce and retest of the July ’17 line may present a spot of interest to establish shorts for a move down to the 2003 trend-line – a scenario we may revisit at a later time should it become relevant.

Silver Daily Chart (Stuck between lines)

Silver daily chart, caught between big trend-lines

Resources for Forex & CFD Traders

Whether you are a new or experienced trader, we have several resources available to help you; indicator for tracking trader sentiment, quarterly trading forecasts, analytical and educational webinars held daily, trading guides to help you improve trading performance, and one specifically for those who are new to forex.

---Written by Paul Robinson, Market Analyst

You can follow Paul on Twitter at @PaulRobinsonFX