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Gold Price Flashes Overbought Signal, Silver Price Constrained by Technical Resistance

Gold Price Flashes Overbought Signal, Silver Price Constrained by Technical Resistance

Nick Cawley, Senior Strategist
What's on this page

Gold (XAU) and Silver (XAG) Price Analysis and Charts.

  • Gold (XAU) overbought and lower prices likely in the short-term.
  • Silver (XAG) oversold but technical indicators continue to weigh.

DailyFX Q2 Forecasts and Top 2019 Trading Opportunities.

Gold (XAU) Remains Overbought in the Near-Term

Gold is looking likely to fade slightly lower in the short-term with one technical indicator – CCI – continuing to flash an overbought signal for the precious metal. The recent one-month high made yesterday, pushed the CCI indicator to its highest level since late-February when the price of gold was trading more than $1,340/oz. Any short-term sell-off will likely be constrained by support at $1,292/oz. ahead of the 61.8% Fibonacci retracement level at $1,287/oz. Below there, old horizontal support levels at $1,281/oz. and $1,277/oz. come into play.

How to Trade Gold: Top Gold Trading Strategies and Tips

Gold (XAU) Daily Price Chart (August 2018 – May 15, 2019)

Silver (XAG) – Downtrend Remains in Place

A series of lower highs off the February 20 high print dominates Silver’s chart and suggests lower prices ahead. Silver currently changes hands at $14.82 and is under pressure from a technical perspective, as it trades below all three moving averages and the 23.6% Fibonacci retracement level at $14.91, its initial upside target. For a medium-term bear market to gain more credence, Silver will need to close below the May 2 low at $14.56 to establish a fresh lower low. The CCI indicator has moved out of oversold territory but recent upticks have proved weak and short-lived.

Silver (XAG) Daily Price Chart (August 2018 - May 15, 2019)

Trading the Gold-Silver Ratio: Strategies and Tips.

IG Client Sentiment shows that retail traders are 72.2% net-long gold, a bearish contrarian indicator. However, recent daily and weekly sentiment shifts suggest that the price of gold may shift higher, despite traders being net-long.

--- Written by Nick Cawley, Market Analyst

To contact Nick, email him at nicholas.cawley@ig.com

Follow Nick on Twitter @nickcawley1

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

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