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Tuesday, October 15, 2013

Gold and Silver charts: an update

Gold Chart Pattern

Gold_Oct1413 

Two weeks back, the long-term weekly bar chart pattern of gold had clearly shown a bear market in progress. Weekly technical indicators were bearish, and more downside in gold’s price was expected. The 6 months daily bar chart pattern of gold (above) confirms the expectation.

All three daily EMAs have resumed their down moves after a strong bear market rally that provided a good exit opportunity. Gold’s price is again moving down. Down day volumes have been strong, which means bears have the upper hand.

Daily technical indicators are bearish. MACD is falling below its signal line in negative territory. RSI is below its 50% level. Slow stochastic has entered its oversold zone. A test of the Jun ‘13 low is a possibility.

The only silver lining for bulls is that gold’s price appears to be trading within a ‘falling wedge’ pattern, from which an upward break out is likely. But one needs to wait for the pattern to form fully. On longer-term weekly chart (not shown), the 50 week EMA is on the verge of crossing below the 200 week EMA. The ‘death cross’ will technically confirm a long-term bear market.

Silver Chart Pattern

Silver_Oct1413

The 6 months daily bar chart pattern of silver has not fallen much in the past two weeks, but that may be a brief respite. Another attempt at a rally took silver’s price above its 20 day and 50 day EMAs but found strong resistance at the 22.50 level.

All three daily EMAs have resumed their down moves. Volumes have been strong on down-days. Bears are using every opportunity to sell. Lower levels and a test of the Jun ‘13 low are likely.

Daily technical indicators are looking bearish, but not oversold. MACD has slipped below its signal line in negative territory. RSI and Slow stochastic are both falling below their 50% levels.

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