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Tuesday, January 22, 2013

Gold and Silver charts: an update

Gold Chart Pattern

Gold_Jan2213

Gold’s one year daily bar chart pattern has been in a falling trend within a downward channel for nearly 4 months – after testing but failing to cross the level of 1800 in Oct ‘12.

Ever since gold’s price corrected from a double-top reversal pattern formed above the 1900 level back in Sep ‘11, it has been consolidating within a rectangular band between 1525 and 1800. Such a long period of consolidation has tested the patience of investors, but has provided good trading opportunities.

Daily technical indicators are looking bullish. MACD is negative, but is rising above its signal line. RSI has moved above its 50% level. Slow stochastic has entered its overbought zone. Gold’s price can move up some more, till it encounters likely resistance at about 1710 (from the downtrend line connecting the Oct ‘12 and Nov ‘12 tops).

On longer-term weekly chart (not shown), gold’s price continues to trade well above its rising 200 week EMA – keeping the bull market intact.

Silver Chart Pattern

Silver_Jan2213

Silver’s one year bar chart pattern has been in a corrective mode since touching an intra-day high of about 35.50 in Oct ‘12. It has formed a bearish pattern of lower tops and lower bottoms.

Daily technical indicators are looking bullish – thanks to the rally during the last 2 weeks. MACD is rising above its signal line, and ready to enter positive territory. RSI has climbed from its oversold zone to the 60% level. Slow stochastic has entered its overbought zone.

Falling volumes indicate that the rally may be on its last legs. On longer-term weekly chart (not shown), silver is trading above its 200 week EMA. Bulls have no immediate cause of worry.

1 comment:

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