Tuesday, March 20, 2018

Gold and Silver charts: bears remain on top

Gold chart pattern

The following remark was made in the previous post on the daily bar chart pattern of Gold: "Any attempt at a rally will induce bear selling."

Gold's price did rally above its 20 day and 50 day EMAs - touching an intra-day high of 1342 on Wed. Mar 7, but closed much lower to form a 'reversal day' bar (higher high, lower close).

That was a trigger for bears to wrest control. Gold's price consolidated sideways till Mar 15, and tested support from the 'support/resistance zone' on Fri. Mar 16. 

On Mon. Mar 19, gold's price dropped inside the 'support/resistance zone' but bounced up to close higher - forming another 'reversal day' bar (lower low, higher close), as bulls fought back.

Daily technical indicators are in bearish zones, and not showing any upward momentum. The 'support/resistance zone' has withstood three tests in the past 5 weeks, but may get breached on a subsequent test.

The US Dollar index has been consolidating sideways during Mar '18 - which may explain why gold's price has gone nowhere.

On longer term weekly chart (not shown), gold’s price closed above its three weekly EMAs in long-term bull territory.  Weekly technical indicators are in bullish zones, but showing downward momentum. Some more correction or consolidation is likely. 

Silver chart pattern

The formation of a 'double bottom' reversal pattern in the previous post on the daily bar chart pattern of Silver was expected to lead to a technical bounce.

The technical bounce did occur and took silver's price all the way up to its sliding 200 day EMA, which provided strong resistance. Bears jumped in with their successful 'sell on rise' strategy.

Silver's price dropped to close below its three EMAs in bear territory, but has bounced up from the support zone between 16.10 & 16.20.

Daily technical indicators are in bearish zones and showing downward momentum. Bulls have defended the support zone well - but for how much longer?

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

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