Tuesday, October 24, 2017

Gold and Silver charts: bears tighten their grips

Gold chart pattern


The following remarks appeared in the previous post on the daily bar chart pattern of Gold: "Daily technical indicators are looking bearish and oversold. A technical bounce may follow. Expect some resistance from the merged 20 day and 50 day EMAs and stronger resistance from the 'support/resistance zone'."

Gold's price bounced up with an upward 'gap' on Oct 10, but faced resistance from the merged 20 day and 50 day EMAs for a couple of days. It then moved up inside the 'support/resistance zone' - only to form a 'reversal day' bar (higher high, lower close) on Oct 16.

Bears used the opportunity to sell. Gold's price has dropped below its 20 day and 50 day EMAs but managed to stay above its 200 day EMA in bull territory.

Daily technical indicators are in bearish zones. Another test of support from the 200 day EMA seems on the cards. A possible breach of the 200 day EMA can drop gold's price to the zone between 1240 & 1250.

On longer term weekly chart (not shown), gold’s price closed below its 20 week EMA but above its 50 week and 200 week EMA in long-term bull territory.  Weekly MACD and Slow stochastic are looking bearish and showing downward momentum. RSI is in neutral zone.

Silver chart pattern


The daily bar chart pattern of Silver bounced up with an upward 'gap' and good volume support on Oct 10, and closed at its 200 day EMA.

Silver's price continued to rally and touched an intra-day high of 17.49 on Oct 16, but formed a 'reversal day' bar (higher high, lower close). It has been oscillating about its three EMAs, which have converged together. 

A sharp move is likely to follow. Odds are better for a downward move.

Daily MACD and RSI are in neutral zones. Slow stochastic is in bullish zone after falling from its overbought zone.

On longer term weekly chart (not shown), silver’s price closed at its merging 20 week and 50 week EMAs, but below its sliding 200 week EMA in a long-term bear marketWeekly MACD and RSI are in neutral zones. Slow stochastic is falling towards its neutral zone.

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