Tuesday, June 26, 2018

Gold and Silver charts: bears calling the shots again

Gold chart pattern


Note the following comments from the previous post on the daily bar chart pattern of Gold: "Expect some more sideways consolidation before gold's price can either breakout above 1310 or fall towards 1280. A test of support from 1280 seems the more likely near-term possibility."

On Thu. Jun 14, gold's price made a desperate attempt to cross above 1310. Resistance from the falling 50 day EMA ensured a close inside the 'Support-Resistance zone' between 1300 and 1310.

That was the trigger for bears to attack. On Fri. Jun 15, a sharp correction accompanied by a volume surge dropped gold's price to a close below 1280. A weak effort at a pullback above 1280 was met with more selling by bears.

Daily technical indicators are looking oversold. But don't expect a strong fight back by bulls. Any attempt at a pullback will provide another selling opportunity. The 'death cross' of the 50 day EMA below the 200 day EMA has technically confirmed a return to a bear market.

On longer term weekly chart (not shown), gold’s price closed below its three weekly EMAs in long-term bear territory.  Weekly MACD and RSI are falling in bearish zones. Slow stochastic is falling inside its oversold zone. Some more correction is possible.

Silver chart pattern


For the second time in 2 months, the daily bar chart pattern of Silver surged above 'Resistance Zone 1' (between 16.90 and 17) with strong volume support. For the second time, 'Resistance Zone 2' (between 17.30 and 17.40) proved to be insurmountable.

Bears swung into action immediately. Silver's price plummeted below its three EMAs with a volume surge on Fri. Jun 15, wiping out all gains made in the previous 7 trading sessions.

On Thu. Jun 21, silver's price dropped to seek support from the 'Support zone' (between 16.10 and 16.20), only to bounce up - as it has done several times during the past 5 months. How much longer can the 'Support zone' hold?

Daily technical indicators are in bearish zones, with MACD showing downward momentum. Slow stochastic is trying to recover from its oversold zone. All three EMAs are sliding down, and silver's price is trading below them in a bear market.

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 in bearish zones. Slow stochastic is showing downward momentum. 

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