Gold/Silver Technical Outlook:
- Gold is trading around an important area on the daily and 4-hr chart
- Silver remains confined within a channel, renewed weakness anticipated
Gold recently broke above the 200-day moving average and June trend-line, an area of confluence that had once kept a lid on higher levels. The pullback the past couple of sessions is bringing that area into play along with another angle of support via a trend-line from the late September low.
This is making for another confluent level that makes this spot on the chart, seen on both the daily and 4-hr, a very important one for the upcoming days. A former level of resistance getting tested as support is a common technical occurrence and resistance turned support should be respected be respected until broken.
For would-be longs, this could offer an attractive spot to enter the multi-week trend higher towards a test of yet another area of significant confluence in resistance. If support breaks then stops on longs would get triggered, and for those looking to short a break of support may usher in a leg lower.
On the top-side, if support holds, then look for peaks created during July, August, and September in the low 1830s to come into play, along with the confluent trend-line running down off the August 2020 high. That trend-line is part of a macro-sized wedge that has been forming since last year. It could have big meaning as we head into 2022.
Gold Daily Chart
Gold 4-hr Chart
Silver is backing off resistance around 24.75, and on that is testing a trend-line off the September low. It’s not as big of an inflection point as it is for gold, but nevertheless traders can use it as a guide. Stay above and the uptrend trend stays intact as is, break below and a larger move lower could ensue.
Silver Daily Chart
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---Written by Paul Robinson, Market Analyst
You can follow Paul on Twitter at @PaulRobinsonFX
