Tuesday, October 10, 2017

Gold and Silver charts: strong bear onslaughts force bull retreats

Gold chart pattern

Bearish technical indicators had led to the following comments in the previous post on the daily bar chart pattern of Gold: "Gold's price is trading well above its rising 200 day EMA in a bull market. However, bears may try to assert themselves and push gold's price down towards the 200 day EMA."

A 'reversal day' bar (higher high, lower close) on Sep 26 triggered a fall below the 'support/resistance zone' between 1300 & 1310, and a test of support from the 200 day EMA.

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 has corrected 67% of its entire 147 points rally from the Jul 10 low of 1215 to the Sep 8 top of 1362. That is more than the Fibonacci 61.8% retracement level which indicates a change of trend.

By closing above its 200 day EMA, gold's price may have been temporarily saved from falling into a bear market. But bears are not going to give up their advantage so easily.

On longer term weekly chart (not shown), gold’s price bounced up after receiving support from its merging 50 week and 200 week EMA to close in long-term bull territory. The 'golden cross' of the 50 week EMA above the 200 week EMA has not been a convincing one yet. Weekly technical indicators are looking bearish and showing downward momentum.

Silver chart pattern

The following comments appeared in the previous post on the daily bar chart pattern of Silver: "Bulls may attempt to push silver's price above the 200 day EMA into bull territory. Bears are likely to prevent any such adventure."

Silver's price climbed above 17.25 intra-day on Sep 26 but faced strong resistance from its falling 20 day EMA, and dropped to close below its three EMAs in bear territory - forming a 'reversal day' bar.

After touching an intra-day low of 16.35, silver's price bounced up with good volume support to close above 16.75 in bear territory. 

Daily technical indicators are correcting oversold conditions. A pullback to the 200 day EMA is likely. Bears may use any rise to sell again.

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 looking neutral to bearish.

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