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Tuesday, April 22, 2014

Gold and Silver charts: an update

Gold Chart Pattern

Gold_Apr2114

In the previous post on the daily bar chart pattern of gold, a ‘reversal day’ pattern formed on Mar 17 ‘14 and the failure of the 50 day EMA to cross above the 200 day EMA (‘golden cross’) were mentioned as technical reasons for explaining gold’s slide back into bear territory.

However, bullish ‘rounding bottom’ patterns formed on RSI and Slow stochastic indicators pointed to a likely attempt at a rally by bulls. Note that the rally faced stiff resistance from the 200 day EMA, and gold’s price crashed down below all three EMAs on a volume surge.

The zone between 1260-1280 acted as a support/resistance zone during the past 6 months. Some buying interest may emerge there. But bears are likely to use any rally to sell. If 1260 gets breached, then the previous low of 1180 is likely to be tested.

Daily technical indicators are in bearish zones. MACD is negative, and has crossed below its signal line. RSI and Slow stochastic are falling below their respective 50% levels. Time for gold bulls to go into hiding.

On longer term weekly chart (not shown), gold’s price is trading below all three weekly EMAs. Weekly technical indicators have just entered bearish zones.

Silver Chart Pattern

Silver_Apr2114

The following comments were made in the previous post on the daily bar chart pattern of silver: “Silver’s price is consolidating within a bearish ‘flag’ pattern from which the likely break out is downwards.”

A high-volume break down below the ‘flag’ occurred last week. Silver’s price is trying to form a bottom at 19.25, but is likely to slip further down to breach its previous low of 18.75.

Daily technical indicators are in bearish zones – suggesting further downside. There seems to be no silver lining to dark bearish clouds.

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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