Gold/Silver Technical Highlights:
- Gold broke through a few important support lines
- Silver breakdown has support in focus below, but to remain heavy
See what drivers DailyFX analysts expect to move Gold in the coming weeks in the Q1 Gold Forecast.
Gold broke through a few important support levels
First it was the November trend-line looked at last week, then the area just above 1300, and as of yesterday it was the top-side of a channel from August. No buyers showed up at any of those levels which leaves leave support at 1276 as the next level to try and hold.
While we may soon see a bounce, it isn’t expected to be a long-lasting bounce as damage done keeps piling up. Former support (levels outlined above) will become new resistance. The broader objective becomes the lower-side line of the August/November channel down near the 200-day (1246).
Tactically, would-be shorts may want to wait for a bounce as risk of some type of bounce increases, but overall the path of least resistance looks to be in sellers favor. Longs lack appeal at this time without strong support and bullish price action.
Check out the IG Client Sentiment page to see how changes in trader positioning can help signal the next price move in gold and other major markets.
Gold Daily Chart (Support breaking is bringing new levels into play)
Silver breakdown has support in focus below, but to remain heavy
Silver unravelling despite generally weaker than gold, actually has a big support zone closer in focus than gold. But that doesn’t make it any more appealing from the long-side. Bounces likely to be short-lived and perhaps an oversold bounce for the nimble could come around 14.80 if price action is right, but again it looks as those damaging declines in precious metals will keep the heat on them for a bit.
Silver Daily Chart (Next up is support from range created last year)
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—Written by Paul Robinson, Market Analyst
You can follow Paul on Twitter at @PaulRobinsonFX