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.
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Gold Weekly Chart (Bullish reversal)
Gold Daily Chart (Looking for higher low to develop)
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)
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---Written by Paul Robinson, Market Analyst
You can follow Paul on Twitter at @PaulRobinsonFX