Gold Trading Soft, Silver Price Trying to Hold Important Support
Gold & Silver Price Outlook
- Gold trading near the bottom of a would-be long-term bull-flag
- Silver price trading on March trend-line, so far holding well
Gold Sitting Soft, Silver Price Trying to Hold Important Support
The price of gold has been soft, but sits at a spot on the chart that may soon act as a low of some type. The underside trend-line of a developing bull-flag lies just beneath yesterday’s minor reversal-day low. It could use a little more thorough of a testing, but perhaps we have seen enough as rarely are things perfect in markets.
A rise from this area or even a little lower could put in yet another pivot to the bull-flag developing since the August peak. Given the size and duration of the pattern it could become a major macro development that eventually sends gold much higher over the long-term.
But in the interim there is still a lot of work to be done before that can become a reality. For short-term traders things are in a bit of limbo as the tone is still weak and support hasn’t been rejected in a meaningful manner. As a result, the general near-term trading bias is seen as neutral.
Gold Weekly Chart (budding bull-flag)
Gold Daily Chart (watch lower parallel)
The price action in silver is more interesting, with the metal sitting on the March trend-line. It was a strong source of support in January and with each test it becomes increasingly important. Yesterday’s reversal may do the trick as a successful test.
For this to be the case, price needs to stay above 25.83 on a closing basis. If it does, then the outlook is near-term neutral to bullish. A close below yesterday’s low, though, will open up a path towards lower levels. First up as support on a break will be the lows from January that are in confluence with the rising 200-day currently at 23.97.
From a tactical standpoint, would-be longs may look to lean against yesterday’s low as a potentially solid risk/reward opportunity.
Silver Daily Chart (March trend-line)
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---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.