Tuesday, December 26, 2017

Gold and Silver charts: pullback rallies running out of steam?

Gold chart pattern


Note the following remarks from the previous post on the daily bar chart pattern of Gold: "More correction can't be ruled out. However, a pullback towards the 200 day EMA can occur at any time. That will provide a selling opportunity."

Gold's price fell to an intra-day low of 1238 on Dec 12 - its lowest level in 5 months. That triggered the expected pullback rally towards the 200 day EMA. On Dec 22, gold's price closed above its three EMAs in bull territory after more than 3 weeks.

The pullback rally has been accompanied by receding volumes. The rally may not last long. Another bear onslaught can occur at any time.

Daily technical indicators are looking bullish. MACD has crossed above its signal line and is rising in bearish zone. RSI has moved above its 50% level. Slow stochastic is rising towards its overbought zone, and can limit further upside in gold's price.

On longer term weekly chart (not shown), gold’s price rallied to close above its three weekly EMAs in long-term bull territory.  Weekly MACD and RSI are in neutral zones. Slow stochastic is trying to emerge from its oversold zone.

Silver chart pattern


Note the following comments from the previous post on the daily bar chart pattern of Silver: "Daily technical indicators are looking bearish and oversold. That can trigger a technical bounce, which will provide bears another opportunity to sell."

Silver's price touched an intra-day low of 15.65 on Dec 12, followed by a technical bounce above its 20 day EMA. 50 day and 200 day EMAs are still falling, and silver's price is trading below them in a bear market.

Daily technical indicators have corrected oversold conditions and are showing upward momentum. MACD has crossed above its signal line in bearish zone. RSI has just managed to move above its 50% level. Slow stochastic has climbed up to the lower edge of its overbought zone.

Low volumes during the technical bounce means bulls may be running out of breath. Bears are likely to attack soon.

On longer term weekly chart (not shown), silver’s price closed below its three falling weekly EMAs in a long-term bear marketWeekly technical indicators are in bearish zones. Slow stochastic is trying to emerge from its oversold zone, and hinting at some more upside in silver's price.

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