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Tuesday, December 20, 2016

Gold and Silver charts: bulls sent packing by fierce bear onslaughts

Gold chart pattern


The daily bar chart pattern of Gold shows a severe one way fall due to relentless selling by bears ever since Trump unexpectedly won the US Presidential election.

Gold's price dropped to an 11 months low of 1125 before bouncing up to close above 1140. All three EMAs are falling, and gold's price is trading well below them in a bear market.

Daily technical indicators have been in oversold zones for more than a month, and showing positive divergences by not falling lower with gold's price. Don't expect a trend reversal any time soon, as bears are selling on every rise.

Avoid bottom fishing till gold's price starts forming a bottoming out pattern.

On longer term weekly chart (not shown), all three weekly EMAs are falling, and gold’s price has closed well below them in a long-term bear market. Weekly technical indicators are inside their respective oversold zones. 

Silver chart pattern


After oscillating about its 20 day EMA for 6 trading sessions, the daily bar chart pattern of Silver dropped sharply on Thu. Dec 15, but received good support from the 16 level.

The 'death cross' of the 50 day EMA below the 200 day EMA has technically confirmed a return to a bear market. 

All three daily technical indicators are looking bearish, but showing positive divergences by not falling lower with silver's price.

A technical bounce is possible. Avoid using it as a buying opportunity, as silver's price may drop to 15.

On longer term weekly chart (not shown), silver’s price closed well below its three weekly EMAs in a long-term bear market. Weekly MACD and RSI are sliding down in bearish zones. Slow stochastic is inside its oversold zone.

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