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Tuesday, December 15, 2015

Gold and Silver charts: an update

Gold chart pattern



The following remarks were made in the previous post on the daily bar chart pattern of gold: "The fall during Nov ‘15 has been a bit steep. That can lead to a short covering rally."

Gold's price dropped below 1050 intra-day on Dec 3, and bounced up sharply on strong volumes to close above its falling 20 day EMA the next day. Bears quickly smothered the rally.

Despite a couple of intra-day moves above the 20 day EMA, gold's price resumed its downward slide to close just below the 1060 level.

Daily technical indicators are looking bearish, and showing downward momentum. Fears of an interest rate hike by the US Fed had caused huge selling in Oct and Nov '15. It will be interesting to see what happens if the Fed does increase the interest rate.

On longer term weekly chart (not shown), gold’s price is trading well below its three weekly EMAs in a long-term bear market. MACD is falling below its signal line in negative zone. RSI is falling below its 50% level. Slow stochastic is trying to emerge from its oversold zone.

Silver chart pattern



After touching an intra-day low of 13.80 on Dec 3, the daily bar chart pattern of silver bounced up to close above its 20 day EMA on the following day. On Dec 7, silver's price crossed above the 14.60 level intra-day but faced resistance from its falling 50 day EMA.

It formed a 'reversal day' pattern (higher high, lower close) that ended the brief rally. Silver's price touched a new intra-day low of 13.60 on Dec 14.

Daily technical indicators are in bearish zones and looking oversold. However, they are showing positive divergences by not falling to new lows. Another technical bounce is possible.

On longer term weekly chart (not shown), silver’s price is trading well below its three weekly EMA in a long-term bear market. MACD is sliding down below its signal line in negative zone. RSI is moving down below its 50% level. Slow stochastic is inside its oversold zone.

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