Amazon deals

Tuesday, February 16, 2016

Gold and Silver charts: an update

Gold chart pattern


The daily bar chart pattern of gold easily crossed above its 200 day EMA, and then shot up vertically like a rocket to a level last seen a year ago. By moving above its two previous tops of Oct '15 and May '15, the bearish pattern of 'lower tops and lower bottoms' has been negated.

The 20 day EMA has crossed above the 200 day EMA. The 50 day EMA is trying to follow suit. The 'golden cross' will technically confirm a return to a bull market after more than 4 years.

What happened in the past 2 weeks to warrant such a sharp rally? It was a mad rush towards safety on fears of a collapse in the global banking system, which was triggered by the shocking news from Deutsche Bank. 

As global stock markets tanked amid concerns about a prolonged recession, investors and central bankers started seeking refuge in gold's 'safe haven' status.

All three daily technical indicators are looking extremely overbought, which can lead to a price pullback towards the 1180 - 1200 zone. Bulls may take the opportunity to buy again.

On longer term weekly chart (not shown), gold’s price jumped above its 20 week and 50 week EMAs with strong volume support, but failed to overcome strong resistance from its 200 week EMA. Weekly technical indicators are looking bullish but a bit overbought.

Silver chart pattern


The daily bar chart pattern of silver tried to emulate gold's rocket-like price rally by easily crossing above its 200 day EMA. But the rally stalled at 16 - stopping short of its Oct '15 top and failing to negate the bearish pattern of 'lower tops and lower bottoms'.

All three daily technical indicators are inside their overbought zones. A pullback towards - and a likely drop below - the 200 day EMA is on the cards.

In the unlikely event that silver's price receives support from the 200 day EMA and bounces up with good volume support, it can be used as a buying opportunity. 

On longer term weekly chart (not shown), silver’s price crossed above its 20 week and 50 week EMAs with good volume support, but closed well below its falling 200 week EMA in a long-term bear market. Weekly technical indicators are looking bullish, and showing upward momentum.

1 comment:

Subhankar said...

Gold slumps below $1200 ...

http://www.moneycontrol.com/news/commodities/gold-slumps-below-361200-risk-appetite-dents-safe-haven-demand_5494181.html