Gold/Silver Technical Highlights:
- Gold sitting on support, further strength will have resistance in focus
- Silver is trading into a formidable area of resistance
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Gold sitting on support, further strength will have resistance in focus
Gold has spent the week so far consolidating on support after breaking above the 1243 level last week. So far the price action is uninspiring in that we aren’t seeing follow-through, but will continue to respect support for as long as we don’t see gold slice back into the 1230s. If it does then the lower parallel off the November low will come into focus, followed by the trend-line off the August low.
Looking higher, with support holding, a move could develop to the 200-day MA at 1254 and falling and then the upper parallel of the developing bear-flag since the summer and upper parallel of the short-term channel from last month.
Gold traders are collectively holding a large long position, check out IG Client Sentiment for details as to how this may be a headwind for the precious metal.
Gold Daily Chart (Sitting on support)
Silver is trading into a formidable area of resistance
Silver continues to push ever so slightly higher and is currently squaring off with resistance at current levels in the 14.70s up to 14.91. There were numerous tops back in October/November, making it a tough spot to climb through.
We are seeing silver lead gold at the minute, a rare event, and if gold can get into gear then silver might find enough strength to push on through. However, caution is warranted on buying in anticipation of this happening as buying into resistance is usually not a consistent approach over the long haul.
Silver Daily Chart (Solid resistance at hand)
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---Written by Paul Robinson, Market Analyst
You can follow Paul on Twitter at @PaulRobinsonFX