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Tuesday, February 19, 2013

Gold and Silver charts: an update

Gold Chart Pattern

Gold_Feb1913

Two weeks back, the 6 months daily bar chart pattern of gold was falling within a downward channel and showing signs of distribution. Last Friday’s (Feb 15) high volume drop has confirmed that bears are once again taking the upper hand in the near term.

On the 2 years weekly bar chart pattern above, gold’s price is trading well above its rising 200 week EMA – indicating that the long-term bull market is intact.

But there are signs that the lower end of the trading range between 1525 and 1800 – within which gold’s price has consolidated since Sep ‘11 – may get tested.

Weekly technical indicators are bearish. MACD has dropped into negative territory below its falling signal line. RSI and slow stochastic are both falling below their 50% levels towards their oversold zones.

Silver Chart Pattern

Silver_Feb1913

On the 6 months daily bar chart pattern of silver, analysed two weeks back, the following comment was made: “All three EMAs are converging, which is often followed by a sharp move. The move can be in either direction.”

Unfortunately for the bulls, the sharp move was downwards – keeping silver’s price within a downward channel. However, the 200 week EMA is still rising – so the long-term bull market is intact.

Weekly technical indicators are bearish, which means the correction is likely to continue. MACD is below its signal line, and has entered negative territory. RSI and slow stochastic are falling below their 50% levels.

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