Gold/Silver Technical Highlights:
See what drivers DailyFX analysts expect to move Gold in the coming weeks in the Q1 Gold Forecast.
Gold pulling back towards support area
Last week, when I last looked at gold the feeling was that it was too high to buy, too strong to short. With the help of overbought conditions and the Dollar bouncing off support, gold is pulling back from very near a level created back in May, just above the more significant 1305/10-zone.
The 1305/10-zone is getting tested now as potential support, but since it traded strongly through it last week if we see no response by the market again, then it will come off the board as an area that still matters to the market.
A drop below 1305 will have the January 3 day high in play at 1298 and the trend-line off the November low. A test of both at the same time (confluence) could offer up a good risk/reward opportunity for would-be longs to enter and have a line-in-the-sand for stop placement.
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 (Watch support)
Silver reversing lower off major long-term resistance
Silver is reversing off a big inflection point. On Thursday, a small reversal bar was posted at an underside test of the 2003 trend-line and t-line running down from July 2016. Indeed, a very big long-term spot. The reversal already has price pushing lower into the highs from in early January. There is minor trend-line support close to 15.50, but it’s not as sturdy as the similarly positioned trend-line from November in gold. With big long-term resistance standing in the way the dip in silver is viewed as less appealing than the one in gold.
Silver Daily Chart (big long-term resistance)
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---Written by Paul Robinson, Market Analyst
You can follow Paul on Twitter at @PaulRobinsonFX
