Tuesday, September 25, 2018

Gold and Silver charts: bears rule but bulls trying to put up a fight

Gold chart pattern

The daily bar chart pattern of Gold has been consolidating sideways within a 'rectangle' pattern for the past five weeks - getting support from the 1190 level and facing resistance from the 1220 level.

Gold's price has been oscillating about its 20 day EMA, and is trading below its falling 50 day and 200 day EMAs in a bear market. Higher volumes on recent down days indicate that bears remain in charge.

A 'rectangle' is an unreliable pattern - sometimes acting like a continuation pattern and sometimes like a reversal pattern. One has to wait for the eventual price breakout before taking any buy/sell decisions.

Daily technical indicators are looking bearish to neutral, and not showing any upward momentum. MACD is above its rising signal line in bearish zone. RSI and Slow stochastic are oscillating in their respective neutral zones.

On longer term weekly chart (not shown), gold’s price closed well below its three weekly EMAs in long-term bear territoryThe 'death cross' of the 50 week EMA below the 200 week EMA has technically confirmed a long-term bear market. Weekly technical indicators are in bearish zones after correcting oversold conditions.

Silver chart pattern

The following comment appeared in the previous post on the daily bar chart pattern of Silver: "Silver's price has resumed its downward journey and may fall below 14.20 in the near term."

Silver's price touched a low of 13.91 on Sep 11, and has been consolidating within a bearish 'rising wedge' pattern for the past three weeks. The likely breakout from the 'wedge' is downwards.

Daily technical indicators are showing some bullish signs. MACD is rising above its signal line in bearish zone. RSI is hovering below its 50% level. Slow stochastic has moved above its 50% level. Silver's price is trading well below its falling 50 day and 200 day EMAs in a bear market. 

On longer term weekly chart (not shown), silver’s price closed well below its three falling weekly EMAs in a long-term bear marketWeekly technical indicators are inside their respective oversold zones.

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