Gold & Silver: Technical Outlook
It is no secret
that the global economy will bounce back into life. However,
questioned has been raised if the short term solutions will provide a
strong platform for the economy to get back to its former glory. The
clue to this answer is (look around you) and you will soon favoured
no as an answer. An article by Jeremy Warner of Telegraph pictured a
sombre but realistic view to a neutral pace in the next few years or
even decade. Permanent stagnation was the key word used by Mr Warner,
with the argument that after the 2008 financial crash slightly
further away - the current outlook remains uncertain and weak. He
also offered the suggestion that current solutions could potentially
lead to bigger financial problems. We heed his comments and ever
since the start of this commentary, we have made a strong view that
not doing anything in the short term will cause havoc in the economy
but in doing so, we are creating future problems as the global casino
(i.e. banks, hedge funds and many more) are back in business with
easy money.
A growing world population is littered with rich old people, while the younger generation has to work a lot harder and longer to attain previous standard of living. Economic cycle has its peak and trough for a good reason. Sustaining this so called peak or semi peak could soon prove to be futile. The so called next economic boom will favoured lesser number of people and instead there will be a growing number of resentment on those in the lower working class. Social economic problem is a time bomb for as long as the economy favoured only the elites.
Gold
Technical Outlook
Weekly
Chart
Should
the yellow metal managed to garner more buying momentum; the next
ideal target is the downtrend line at $ 1351. Only a break above that
key resistance will allow the bull to extent the run higher. Judging
at the current situation, we favoured to short the metal should it
extend any higher. That is despite a positive weekly close after
several dovish comments from economic leaders and at the same time,
safe haven buying on the back of a turbulent week in NASDAQ. Several
indicators are showing a flat sign and the cycle low could resume in
the next week or so. Reduced weekly volume, RSI holding above 50 and
a possible cross lower on MACD further indicate weakness in the next
few weeks.
| Resistance: $ 1325, $ 1347, $ 1355 Support: $ 1266, $ 1277, $ 1304 |
Traders Notes:
Short at $ 1337 stop $ 1351 target $ 1266 area.
| Short Term (1 - 3 weeks) | Medium Term (1 - 3 months) | Long Term (6- 12 months) |
| Bearish $ 1255 | Bearish $ 1200 | Target $ 1550 |
Silver Technical Outlook
Weekly Chart
The white metal is
our preferred metal to break higher as global outlook in the next 3
to 6 months could soon pick up. A stronger demand in copper and other
base metals from China may provide that needed support and allow the
price to break higher to the $ 21.00s. It is crucial that silver can
continue to eke out support around the $ 19.55 to $ 19.75 area. A
sudden surge in demand could see prices rising higher and retest
several key resistances. However, prices will remain capped in this
downtrend line but we see higher prices in the next few weeks once
the moving average crossed higher. Prices need to dictate this pace
first as we have seen in many occasions.
| Resistance: $ 20.09, $ 20.50, $ 21.48 Support: $ 19.50, $ 19.67, $ 19.77 |
Traders Notes:
Should the price stabilise and found support at $ 19.50, buy with a
stop loss of $ 0.30 to target the downtrend line at $ 21.40.
| Short Term (1 - 3 weeks) | Medium Term (1 - 3 months) | Long Term (6 - 12 months) |
| Flat | Flat | Bullish - a potential bull run? |
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article is written according to the author’s views and by no means
indicates investment purpose. Opinions
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14 Apr 2014
