For gold and silver traders, it was another week which saw both metals move in a narrow range with the regions clearly defined on the daily charts. For silver, the deep resistance level overhead is now firmly in place at $16.70 per ounce, with the equally well formed support platform below in the $16.10 per ounce area continuing to hold. Indeed, it was this level I highlighted last week as being key, and to date it has continued to hold and for longer term traders and investors, it is now a question of being patient and waiting for the breakout to confirm the next leg of any trend. Volumes remain average and despite the reversal in sentiment for the US dollar, to date this has had little impact on the metal which has remained range bound. The trend monitor has now transitioned to red highlighting the potential weakness, and should this duly be validated with a break and hold through the platform of support in the $16.10 area, then $15.55 becomes the next logical target.
For gold, the technical picture is similar, with the resistance level here defined at $1210 per ounce and the platform of support below in the $1188 per ounce region. Last week’s price action saw both levels tested and both holding, so once again patience is required with any breakout confirmed with a rise in volume. However, volume has been ebbing away over the last few weeks, and confirming the listless sentiment for the metal at present. For gold, the lack of any meaningful inflation continues to weigh, and as for silver, current weakness in the US dollar has failed to deliver any meaningful momentum. To the bottom of the chart the trend monitor is now in a transitional phase reflecting the current price action.
In summary, and for longer term investors and traders, patience is the key, and as always it will be volume price analysis which then confirms any move away from these regions in due course. Meanwhile for intra day traders, it is gold which perhaps offers more opportunities in terms of solid price moves within the current consolidation phase.
Charts are from NinjaTrader and the trading indicators from Quantum Trading.
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