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Tuesday, October 6, 2015

Gold and Silver charts: consolidating sideways in bear markets

Gold chart pattern

Gold_Oct0515

The daily bar chart pattern of gold has been consolidating sideways for the past 6 weeks within a ‘triangle’ pattern and oscillating about its 20 day and 50 day EMAs. Since a ‘triangle’ is an unreliable pattern, a breakout can occur in either direction.

Down days have outnumbered up days, but volumes have been strong on a couple of recent up days – indicating some buying interest at lower levels.

However, gold’s price continues to trade below its sliding 200 day EMA in a bear market. Every attempt at a rally has been facing bear selling.

Daily technical indicators are looking mildly bullish. MACD has crossed above its signal line in positive zone. RSI moved above its 50% level but its upward momentum has stalled. Slow stochastic has risen to its 50% level.

On longer term weekly chart (not shown), gold’s price faced resistance from its 20 week EMA, and closed below all three weekly EMAs in a long-term bear market. MACD and RSI are in bearish zones. Slow stochastic has moved above its 50% level, but its upward momentum is weakening.

Silver chart pattern

Silver_Oct0515

The daily bar chart pattern of silver broke out upwards with good volume support after spending 6 weeks in a sideways consolidation within a ‘triangle’ pattern.

The rally stalled after touching a high of 15.75. Silver’s price closed below its 200 day EMA in a bear market.

All three daily technical indicators are in bullish zones, and showing good upward momentum. Silver’s price may move up further to test resistance from its 200 day EMA. Expect bear selling to start at any time.

On longer term weekly chart (not shown), silver’s price closed above its 20 week EMA, but is trading below its 50 week and 200 week EMAs in a long-term bear market. RSI and Slow stochastic are in bullish zones, but MACD is still in bearish zone. All three are showing upward momentum.

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