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Tuesday, December 16, 2014

Gold and Silver charts: an update

Gold Chart Pattern

GOLD_Dec1514

In the previous post on the daily bar chart pattern of gold, daily technical indicators were looking bullish, but the support/resistance zone between 1240-1260 was expected to come into play if the bear market rally continued.

A sharp surge above the 20 day and 50 day EMAs – backed by strong volumes – faced resistance from the 1240 level. Gold’s price has dropped below its 20 day and 50 day EMAs once again. The bearish pattern of ‘lower tops and lower bottoms’ remains intact.

Daily technical indicators are turning bearish. MACD has started falling towards its rising signal line in positive zone. RSI has slipped below its 50% level. Slow stochastic has dropped from its overbought zone. Gold’s price may fall towards 1000.

On longer term weekly chart (not shown), gold’s price briefly crossed above its falling 20 week EMA, but is now trading below its three weekly EMAs in a long-term bear market. Technical indicators corrected oversold conditions, but are looking bearish. The down move may gather strength.

Silver Chart Pattern

SILVER_Dec1514

The bear market rally on the daily bar chart pattern of silver crossed above both 20 day and 50 day EMAs, but failed to test the support/resistance zone between 18-19 as its upward momentum stalled short of 17.50. The bearish pattern of ‘lower tops and lower bottoms’ continues to rule the chart.

Daily technical indicators are turning bearish. MACD is barely positive, and is falling towards its rising signal line. RSI has moved sharply below its 50% level. Slow stochastic looks ready to drop from its overbought zone.

On longer term weekly chart (not shown), silver’s price faced resistance from its falling 20 week EMA, and is trading below its three weekly EMAs in a long-term bear market. Technical indicators corrected oversold conditions, but remain in bearish zones. Silver’s price may drop below 14.

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