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Tuesday, April 8, 2014

Gold and Silver charts: bears regain control

Gold Chart Pattern

Gold_Apr0814

The 6 months daily bar chart pattern of gold rallied splendidly from the beginning of the year and gained more than 200 points before topping out with a ‘reversal day’ pattern on Mar 17 ‘14.

Gold’s price rose convincingly above its 200 day EMA – supported by a volume surge. But that wasn’t enough to shake off the bears. Note that the 20 day EMA had managed to cross above the 200 day EMA, but the 50 day EMA could not.

The ‘golden cross’ of the 50 day EMA above the 200 day EMA is one of the technical confirmations of a bull market. Bears ensured that the time wasn’t ripe yet for a trend change. Gold’s price is trading below all three EMAs in a bear market.

Daily technical indicators are bearish. MACD is below its signal line in negative territory, but turning up. RSI failed to move above its 50% level. Slow stochastic is trying to emerge from its overbought zone. Bulls may attempt another rally.

On longer term weekly chart (not shown), gold’s price is trading below all three weekly EMAs in a bear market.

Silver Chart Pattern

Silver_Apr0814

The 6 months daily bar chart pattern of silver shows the strong resistance put up by the 200 day EMA to all attempts at a trend reversal.

Silver’s price is consolidating within a bearish ‘flag’ pattern from which the likely break out is downwards. All three EMAs are falling and silver’s price is trading below them in a bear market.

Daily technical indicators are bearish. MACD is inching up towards its falling signal line in negative territory. RSI is moving sideways below its 50% level. Slow stochastic is trying to come out of its oversold zone.

On longer term weekly chart (not shown), silver’s price is trading below all three weekly EMAs in a bear market.

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