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Tuesday, June 20, 2017

Gold and Silver charts: bears pour cold water on month-long bull party

Gold chart pattern


The following comments appeared in the previous post on the daily bar chart pattern of Gold: "A convincing move above 1296 is required for the bullish pattern of 'higher tops, higher bottoms' to continue. Bears will try to prevent such a move."

Gold's price rallied to a slightly higher top of 1299 on Jun 6, but MACD and RSI touched slightly lower tops. The negative divergences was just the trigger the bears needed to pounce.

A sharp correction dropped gold's price below its 20 day and 50 day EMAs. (At the time of writing this post, gold's price is testing support from its 200 day EMA.)

Daily technical indicators are looking bearish. MACD is falling below its signal line in bullish zone. RSI has slipped below its 50% level. Slow stochastic has dropped like a stone into its oversold zone. 

A technical bounce from the 200 day EMA is a possibility. Bears may use the opportunity to sell again.

On longer term weekly chart (not shown), gold’s price formed a 'reversal' bar (higher high, lower close) and corrected below its 200 week EMA in long-term bear territory. Weekly technical indicators are in bullish zones, but showing downward momentum.

Silver chart pattern


The following comments appeared in the previous post on the daily bar chart pattern of Silver: "Silver's rally may continue a bit longer, but expect bears to pounce at any time."

Silver's price touched an intra-day high of 17.75 on Jun 6 and closed at 17.71. Bears attacked the very next day. A sharp correction dropped silver's price below its three EMAs into bear territory.

(At the time of writing this post, silver's price has bounced up a bit after finding some support at 16.45.)

Daily technical indicators are in bearish zones, and showing downward momentum. Slow stochastic is well inside its oversold zone, and can trigger a technical bounce.

A test of the May 9 low may be on the cards.

On longer term weekly chart (not shown), silver’s price closed below its three weekly EMAs in a long-term bear marketWeekly technical indicators are in bearish zones, and showing downward momentum.

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