Gold Chart Pattern
In the previous post, it was observed that gold’s long-term weekly bar chart was forming a bullish cup-and-handle pattern. The ‘handle’ of the cup is still being formed. Gold’s price is seeking support from its 20 week EMA. An upward bounce from here can take gold’s price above the cup’s ‘rim’ at 1800 and past its all-time high of 1925.
However, a drop below the 50 week EMA will be bearish, and negate the cup-and-handle. Weekly technical indicators are bullish, but showing weakening signs. MACD is positive, but has started falling towards its rising signal line. RSI is falling towards its 50% level. Slow stochastic has formed a bearish rounding-top pattern and dropped from its overbought zone.
Hold, with a strict stop-loss at 1660.
Silver Chart Pattern
The long-term weekly bar chart pattern of silver is also forming a bullish cup-and-handle pattern. The ‘handle’ is seeking support from the 20 week and 50 week EMAs. There is a good possibility of an upward bounce from here, which can take silver’s price past 36 towards 46.
Technical indicators are bullish but showing signs of weakness. MACD is positive and above its signal line, but moving sideways. RSI has dropped close to its 50% level from its overbought zone. Slow stochastic has also formed a cup-and-handle like pattern and has dropped down from its overbought zone.
Remember that technical analysis is an art and not a science. Patterns don’t always play out as expected. Hold with a strict stop-loss at 31. Add more on a move above 36.