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Tuesday, January 21, 2014

Gold and Silver charts: an update

Gold Chart Pattern

Gold_Jan1714

The one year bar chart pattern of gold appears to have formed a ‘double bottom’ reversal pattern around 1180. However, lower volumes during the second bottom in Dec ‘13 and a subsequent weak rally on sliding volumes suggest that gold’s price may not have found a bottom yet.

Note that after crossing above its 50 day EMA and the 1250 level, gold’s price may be forming a bearish ‘rising wedge’ pattern. If the pattern plays out, the eventual break down below the wedge may touch a new low.

Daily technical indicators are in bullish zones, which means the price may see slightly higher levels. MACD has entered positive territory above its signal line, but its upward momentum is waning. RSI is above its 50% level. Slow stochastic is inside its overbought zone.

On longer-term weekly chart (not shown), all three weekly EMAs are falling and gold’s price is trading below them. A long-term bear market is in progress.

Silver Chart Pattern

Silver_Jan1714 

The one year bar chart pattern of silver has been consolidating sideways with a slight upward bias for the past couple of months – forming a bearish ‘flag’ pattern in the process. The eventual break down from the ‘flag’ may take silver’s price to a new low.

Daily technical indicators are in bullish zones, and have formed bullish patterns of rising tops and rising bottoms. But looks can be deceiving some times.

On longer-term weekly chart (not shown), silver’s price is trading below all three weekly EMAs in a long-term bear market.

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