Gold/Silver Technical Outlook:
• Gold took a hit yesterday, seen as heading lower some more
• Silver remains stuck in a downtrend
Last week, gold hit resistance and only stayed up against it for a day or so; the low 1830s turned out to be too much for gold to climb through. Yesterday brought some heavy selling that is seen as only the beginning of a bout of weakness.
We may see a little reprieve in the near-term, perhaps trading back around the 200-day at 1808 again, but between solid bearish momentum off resistance and a lack of meaningful support levels, lower prices are anticipated.
Looking lower, there are only minor support levels to speak of in the short-term. There was a couple of small turn in August at 1780 and 1774. There may or may not support a meaningful low. Hard to say at this juncture, that if we see weakness where a decline may end.
From a tactical standpoint, would-be shorts may want to enter on a countertrend rally. Fresh longs, from this seat, don’t look particularly appealing.
Gold Daily Chart
Silver is still trending solidly lower, with its turn coming off a trend-line dating to June and a small pivot from July. As long as silver stays below last week’s high at 24.86, it seen as vulnerable to selling. When looking at the two charts – silver and gold – while the latter looks headed lower too, silver may be the better short. There isn’t any real meaningful support for a good way lower under 23.
Silver Daily Chart
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---Written by Paul Robinson, Market Analyst
You can follow Paul on Twitter at @PaulRobinsonFX
