Tuesday, June 12, 2018

Gold and Silver charts: facing resistance on every rally

Gold chart pattern

The following comment was made in the previous post on the daily bar chart pattern of Gold: "The breakout below the 'support zone' is a clear hint from bears that they will continue to 'sell on every rise' to retain their advantage."

A support zone - once breached - often turns into a resistance zone. That is precisely what the zone between 1300 and 1310 has become. Bears have sold on every rise to prevent gold's price from crossing above 1310.

The 20 day EMA has crossed below the 200 day EMA. The 50 day EMA is falling towards the 200 day EMA. A 'death cross' of the 50 day EMA below the 200 day EMA will technically confirm a return to a bear market.

Daily technical indicators are conveying mixed signals. MACD is above its rising signal line in bearish zone. RSI is moving sideways just below its 50% level in neutral zone. Slow stochastic is in bullish zone, but its upward momentum has stalled.

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 longer term weekly chart (not shown), gold’s price closed below its 20 week EMA but just above its 50 week EMA and well above its 200 week EMA in long-term bull territory.  Weekly technical indicators are looking neutral to bearish. MACD and RSI are in neutral zones. Slow stochastic is near the edge of its oversold zone.

Silver chart pattern

The sideways price consolidation on daily bar chart pattern of Silver has entered its 5th month. After facing resistance from its sliding 200 day EMA during May '18, silver's price moved up with strong volume support above its 200 day EMA on Thu. Jun 7.

The resistance zone between 16.90 and 17 proved to be a tough hurdle for bulls. Note that volumes were lower during yesterday's surge towards the top of the resistance zone.

Daily technical indicators are looking bullish, and showing some upward momentum. Slow stochastic has entered its overbought zone. Bears may get encouraged to 'sell on rise' again. 

On longer term weekly chart (not shown), silver’s price closed above its 20 week and 50 week EMAs, but well below its sliding 200 week EMA in a long-term bear marketWeekly technical indicators are in neutral zones and showing some upward momentum. 

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