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Tuesday, August 16, 2016

Gold and Silver charts: consolidating after sharp post-BrExit rallies

Gold chart pattern


The following comments were made in the previous post on the daily bar chart pattern of Gold: "Volumes are a bit of a concern. They need to pick up for the rally to sustain. Otherwise, gold's price can see some consolidation." 

Volumes failed to pick up - except on two down days (Aug 5 & 12) - leading to a sideways consolidation that received good support from the 20 day EMA.

Note that gold's price fell short of touching a new 52 week high and appears to be forming a 'triangle' pattern, from which a break out can occur in either direction.

Daily technical indicators are in bullish zones but giving conflicting signals, which often happens during periods of consolidation. MACD is falling below its signal line. RSI has bounced up from its 50% level. Slow stochastic is falling towards its 50% level.

A drop towards the 50 day EMA is a possibility before gold's price can move higher.

On longer term weekly chart (not shown), gold’s price closed above its three weekly EMAs in long-term bull territory for the 10th week in a row. The 'golden cross' of the 50 week EMA above the 200 week EMA, which will signal a return to a long-term bull market, is awaited. Weekly technical indicators have started correcting overbought conditions.

Silver chart pattern


The following comments were made in the previous post on the daily bar chart pattern of Silver"Can silver's price face a correction? Sliding volumes during the past 4 days seem to suggest as much." 

Note that silver's price touched a lower top and dropped below its 20 day EMA, but bounced up after receiving good support from the 19.50 level only to fall below its 20 day EMA once more.

The price pattern appears to be forming a large 'symmetrical triangle' from which a break out can occur in either direction.

Daily technical indicators are looking a bit bearish. MACD is rapidly falling below its signal line in positive zone. RSI is hanging on to its 50% level. Slow stochastic is falling towards its oversold zone.

A test of support from the 50 day EMA is a possibility before silver's price can move higher.

On longer term weekly chart (not shown), silver’s price closed above its 200 week EMA in long-term bull territory for the 7th week in a row. Weekly technical indicators have started correcting overbought conditions.

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