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Tuesday, January 6, 2015

Gold and Silver charts: consolidating sideways in bear markets

Gold Chart Pattern

Gold_Jan0515

Not much has happened on the daily bar chart pattern of gold since the previous post three weeks back. Gold’s price consolidated sideways in a range between 1170 and 1210, with a slight downward bias.

Despite a surge and close above the 1200 level on a volume up tick on Jan 5, gold’s price has  formed a bearish pattern of slightly lower tops and bottoms. The steadily falling 200 day EMA is an indication that bears are in control.

Daily technical indicators are showing some bullish signs. MACD is negative, but has just crossed above its signal line. RSI has managed to climb above its 50% level. Slow stochastic is rising towards its 50% level. However, any attempt at a rally is likely to be short-lived.

On longer term weekly chart (not shown), all three weekly EMAs are falling, and gold’s price is trading below them in a long-term bear market. Technical indicators are looking mildly bullish. Any rally is likely to face bear selling.

Silver Chart Pattern

Silver_Jan0515

The daily bar chart pattern of silver has been consolidating sideways in a range between 15.50 and 16.50 during the past three weeks. The falling 50 day EMA provided overhead resistance.

Silver’s price has formed a bearish ‘descending triangle’ pattern during the past month, from which the likely break out is downwards. The previous low of 14 is likely to be tested, and broken.

Two of the technical indicators – MACD and Slow stochastic – are in bearish zones. RSI is attempting to cross above its 50% level and enter its bullish zone. Any rally will present a selling opportunity to bears.

On longer term weekly chart (not shown), silver’s price is trading below its three weekly EMAs in a long-term bear market. MACD and RSI remain in bearish zones. Slow stochastic is at its 50% level. Silver’s price may drop below 14.

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