Gold Price/Silver Technical Highlights:
Gold price correction could use some more time
After the January 8 blow-off and reversal, gold has done the expected – trade lower to sideways. After those types of runs the market needs a breather. The question is now, has it been long enough to garner enough fresh buying to push gold firmly through those pesky 2011/12 levels created during the topping process back then?
It would seem not, that a bit more time is needed to gain the interest required to push to new heights. It appears most likely at this time that any attempt to run higher beyond the reversal day high at 1611 could fall short of picking up momentum, and run the risk of reversing lower.
However, this doesn’t necessarily mean gold will make for a great short as it seems in the big picture there is more of a bid than offer, and on that attempts to trade lower could be mired by choppy price action.
Ideally, from where I sit, backing-and-filling towards the trend-line from May could offer a nice risk/reward spot to pick up gold for another potential push beyond major long-term resistance. For now, sitting back and being patient may be the best play to make.
Gold Price Daily Chart (needs more time)
Gold Price Charts by TradingView
Gold Price Weekly Chart (set to rally after 2011/12 zone broken)
Silver may continue to weaken towards support
Silver appears likely to continue acting weaker than its big sibling, gold. With that in mind, it might not take much of a turn in negative sentiment towards precious metals to have silver backpedaling, if not undergoing a outright decline. If more weakness sets in, keep an eye on the trend-line from May, along with the price support around 17.30. This could offer up a nice spot, similar to gold, for fresh longs to be initiated.
Silver Daily Chart (may decline more before finding a low)
Silver Price Charts by TradingView
***Updates will be provided on the above technical outlook in webinars held at 1030 GMT on Tuesday and Friday. If you are looking for ideas and feedback on how to improve your overall approach to trading, join me on Thursday each week for the Becoming a Better Trader webinar series.
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---Written by Paul Robinson, Market Analyst
You can follow Paul on Twitter at @PaulRobinsonFX
