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Tuesday, January 19, 2016

Gold and Silver charts: an update

Gold chart pattern

The daily bar chart pattern of gold found good support from the zone between 1040 and 1060, and bounced up with good volume support above its 20 day and 50 day EMAs - boosted by the rush to safety after a panic sell-off in global stock markets.

Gold's price briefly crossed above 1110 - the highest level touched in more than 2 months. Bears resumed their dominance. Gold's price dropped below all its three EMAs before making another effort to cross above its 20 day and 50 day EMAs.

Daily technical indicators are in bullish zones, but not showing much upward momentum. With sanity prevailing in global stock markets, expect gold's price to resume its down move.

On longer term weekly chart (not shown), gold’s price faced resistance from its falling 20 week EMA, and is trading below its three falling weekly EMAs in a long-term bear market. Weekly technical indicators failed to emerge from their respective bearish zones.

Silver chart pattern

The following observation appeared in the previous post on the daily bar chart pattern of silver: "The falling 50 day EMA is proving to be an insurmountable resistance."  

Silver's price tried to follow in the footsteps of the yellow metal, but its rally fizzled out as it failed to overcome the resistance from its 50 day EMA. It has dropped below all three EMAs and closed below the 14 level, and is in danger of falling below its Dec '15 low.

Daily technical indicators are not giving bulls much hope. MACD is moving sideways above its signal line in negative zone. RSI has made several attempts to cross above its 50% level, but slipped down each time. Slow stochastic received support from the edge of its oversold zone, but its upward momentum looks weak.

On longer term weekly chart (not shown), silver’s price is trading well below its three weekly EMAs in a long-term bear market. Weekly technical indicators are in bearish zones, and moving sideways with downward bias.

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