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Tuesday, April 25, 2017

Gold and Silver charts: bulls fight back but bears refusing to give up

Gold chart pattern

The daily bar chart pattern of Gold bounced up sharply after receiving support from its rising 20 day EMA and crossed above the 1290 level to a 5 months high on Apr 17.

The 'golden cross' of the 50 day EMA above the 200 day EMA has technically confirmed a return to a bull market. Gold's price stopped just short of the 1300 level and closed lower to form a 'doji' candlestick pattern. 

Negative divergences visible on MACD and Slow stochastic - which failed to touch new highs with gold's price - triggered a correction that received good support from the 20 day EMA.

Daily technical indicators have corrected overbought conditions, and are showing downward momentum in bullish zones. Some more correction or consolidation is likely.

On longer term weekly chart (not shown), gold’s price is trading above its three weekly EMAs in bull territory. The 20 week and 50 week EMAs need to cross above the 200 week EMA if bulls are to regain control. Weekly technical indicators are in bullish zones but not showing any upward momentum.

Silver chart pattern

The daily bar chart pattern of Silver crossed above the 18.60 level intra-day on Apr 17 but failed to close convincingly above the resistance level of 18.50. That was a signal for bears to mount an attack. 

Silver's price corrected below its 20 day and 50 day EMAs, only to bounce up and close exactly at its 50 day EMA after receiving good support from its 200 day EMA.

Bulls will feel encouraged by a 'hammer' candlestick pattern that has formed at the end of the corrective move, and can trigger the next leg of the rally.

Daily technical indicators are looking bearish. MACD is falling below its signal line in positive zone. RSI has fallen below its 50% level. Slow stochastic has dropped to the edge of its oversold zone. 

On longer term weekly chart (not shown), silver’s price corrected down to its 50 week EMA after facing strong resistance from its sliding 200 week EMAWeekly MACD and RSI are in neutral zones. Slow stochastic has formed a 'double top' reversal pattern inside its overbought zone. 

Expect some consolidation or correction before silver's price can cross above its 200 week EMA into bull territory.

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