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Gold/Silver technical highlights:

  • Gold finally breaks tight trading range
  • Old lows (1160) or worse in the works
  • Silver headed for bear-flag breakdown

Looking for forecasts, long-term trade ideas, and educational content? We got you covered. Check out the DailyFX Trading Guides.

Gold finally breaks tight trading range

Gold was heading for its smallest monthly trading range since July 1996 at only 2.07% from low to high, but yesterday’s move edged gold out of the range. Nevertheless, it’s still been an unusually tight set of trading conditions, and with gold pushing down out of the range we should be in for vol expansion.

It’s possible this is a fake-out jab lower before reversing higher, but we’ll run with a breakdown first and then react accordingly should price action warrant a higher low scenario from August. The next levels of support are the August capitulation-day close at 1174 and then the day low at 1160.

If things start to real heat up and gold sinks below last month’s low, there isn’t anything solid until near 1120, the December 2016 low. In the near-term, the bottom portion of the recent range in the vicinity of 1187/90 should cap a bounce if the breakdown is to remain valid.

Gold traders remain heavily long, check out IG Client Sentiment for details as to how it can be used in your trading.

Gold Daily Chart (Range-break)

Gold daily chart, range-break

Silver headed for bear-flag breakdown

Silver is of course not looking to healthy either, but is showing some relative strength compared to its yellow counterpart. Even as such, it still doesn’t look very healthy with a bear-flag forming following a failure to hold above the August low. Look for it to undercut the monthly low here soon. Big support arrives not far below at the December 2015 low of 13.65.

Silver Daily Chart (Bear-flag, December 2015 low could come soon)

silver daily chart, bear-flag, December 2016 low could come soon

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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