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Tuesday, April 19, 2016

Gold and Silver charts: an update

Gold chart pattern


After touching an intra-day high of 1288 on Mar 11 '16 and gaining almost 250 points from its Dec '15 low, the daily bar chart pattern of Gold has been consolidating sideways within a 'symmetrical triangle' pattern.

The rising 50 day EMA has been providing good support. Gold is trading well above its 200 day EMA in bull territory.

Triangles are unreliable patterns. That means a breakout can occur in either direction. On daily closing chart (not shown), a 'descending triangle' pattern appears to be forming - from which the likely breakout is downwards.

Daily technical indicators are giving mixed signals, which is often the case during sideways consolidations. MACD is barely in positive zone, and moving down. RSI is clinging on to its 50% level. Slow stochastic has dropped below its 50% level. 

On longer term weekly closing chart (not shown), gold’s price is forming a bearish 'head and shoulders' reversal pattern below its 200 week EMA, but is trading above its rising 20 week and 50 week EMAs. Weekly technical indicators are moving sideways in bullish zones.

Silver chart pattern


The daily bar chart pattern of Silver shows a spirited fightback by bulls. A high volume spurt propelled silver's price above its three EMAs into bull territory.

The 'golden cross' of the 50 day EMA above the 200 day EMA has technically confirmed a return to a bull market.

However, bulls are facing some technical challenges. Silver's price rally stalled near its previous (Oct '15) top of 16.30. Volumes have dropped off as silver's price inched higher.

Daily technical indicators are in bullish zones, but MACD and RSI are showing negative divergences by failing to touch new highs. Slow stochastic is well inside its overbought zone and starting to correct.

Expect some correction or consolidation before silver's price can move higher.

On longer term weekly chart (not shown), silver’s price is trading above its 20 week and 50 week EMAs but well below its falling 200 week EMA in a long-term bear market. Weekly technical indicators are in bullish zones. 

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