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Gold & Silver Price Analysis – Breakdowns Have Key Support in Focus

Gold & Silver Price Analysis – Breakdowns Have Key Support in Focus

What's on this page

Gold/Silver Technical Highlights:

  • Gold broke triangle, pressure on multi-month slope
  • Silver could soon be looking at support from Oct/Nov

See what drivers DailyFX analysts expect to move Gold in the coming weeks in the Q1 Gold Forecast.

Gold broke triangle, pressure on multi-month slope

Last week, in a couple webinars we looked at the well-defined symmetrical triangle forming in gold and noted that a breakdown out of the pattern should have it first testing the slope from late August. With it there now along with low from January 4, the beginning of the triangle, we’re at an important crossroad.

A break below 1276 will have a trend-line from November under fire but seen as having a better than 50/50 likelihood of also breaking. If that is the case, then we have to go down a bit before we find any meaningful support, with the 200-day MA falling towards the October swing-high at 1243.

Gold may not decline that far before finding sponsorship, but support will have to arrive without the help of any highly visible levels. On the flip-side, a hold here despite the break in the triangle could keep gold in play for a false pattern breakdown out of the pattern that leads to a drive higher towards the 1305/10-area. This will require an almost immediate turn-around and seen as the low probability outcome.

Check out the IG Client Sentiment page to see how changes in trader positioning can help signal the next price move in gold and other major markets.

Gold Daily Chart (At crossroads)

Gold daily chart, at cross-roads

Silver could soon be looking at support from Oct/Nov

Silver continues to be viewed as the weaker of the two major precious metals. It’s been like that for quite some time and until stronger silver vs. gold becomes a consistent theme, I’ll continue to run with the notion that silver will outperform on the downside. The breakdown from resistance could soon have the 14.90/70 support zone from the fall in focus if the 200-day doesn’t prove to hold much weight right here.

Silver Daily Chart (Oct/Nov support look to be next)

Silver daily chart, Oct/Nov support look to be next

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

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.