Gold & Silver Price Analysis – Can These Things Rally, Even a Little?
Gold/Silver technical highlights:
For the intermediate-term technical outlook and expected fundamental drivers in the months ahead, check out the DailyFX Q3 Gold Forecast.
Gold trying to break trend-line resistance
Gold price is trying to cross an important threshold, the trend-line bearing down from a swing high nearly two-months ago. It’s pressed on it several times in recent sessions, and as we discussed in yesterday’s webinar this increases the odds that it will break. Upward pressure is also coming from the top the 1205/1195 support zone.
A clean break above may not spark a sharp rally, but it will be a warning shot to shorts and a beacon of light for those looking to scoop the metal for at least a countertrend rally. For would-be longs, a safer approach may be to wait for a confirmed crossing of trend resistance and then a higher-low to form on a pullback.
Stay below the t-line and the trend remains firmly intact. The past 24-hours price has been hugging the trend-line, so we should see some type of resolution very soon.
Gold traders remain long by a hefty margin of 6-1; check out the IG Client Sentiment page for details as to why this is a headwind for higher prices.
Gold 4-hr Chart (Trend-line in focus)
Silver working on building a descending wedge
Silver has a different look to it than gold, with a descending wedge forming on the 4-hr. Ideally, given the descending nature of the pattern and general trend weakness, a resolution to the downside develops.
But if the top-side trend-line is broken (likely along with gold breaking the June trend-line), then look for some type of rally to develop. However, between the two metals, gold is the preferred long candidate on any upward breaks of resistance, while silver favored as a short with a pattern breakdown.
Silver 4-hr Chart (Descending wedge developing)
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---Written by Paul Robinson, Market Analyst
You can follow Paul on Twitter at @PaulRobinsonFX
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.