Gold & Silver Weekly; Envisaged Gold at $1100!
The analogy of a “picture worth a thousand words” should not be taken lightly.
Continued talks among central bankers to provide accommodative stance to stimulate the economy is not new “news” in the market. Overall bullish environment is fuelled by huge borrowing of future monies that government are printing hastily to make sure the economy could regain its composure and recover. It remains to be seen but vested interest to keep the equity market at its current rate is high and in mass. A strong equity market regardless of poor outlook is deemed essentials among developed economies. QE programmes have a diminishing return and the Federal Reserve to unwind looks imminent. A correction in the equity market will be deemed favourable as the economy continues to recover. Exercising cautioned in the next few weeks in these markets is highly advised as profit taking could be the next action. Once the weak hands are cleared, the market can continue to resume higher should the distribution of wealth is done effectively.
Gold Technical Outlook
Failure to hold $ 1251 area and lack of follow up buying after a bullish weekly candlestick has placed gold at a dire position in the short term. Selling pressure continue to escalate after the announcement by the Fed that tapering could start as early as December. Gold continue to price in the aftermath of tapering and investors are losing faith in the yellow metal. If gold breaks below the last support at $ 1220, a revisit to its previous low looks imminent. Therefore, a potential low at $ 1100 is possible if $ 1180 is taken out hard. MACD line has got rooms for further selling and the RSI has not trade at oversold territory as yet.
note that the market could push for a corrective rebound and kick
start a short round of bargain hunting among investors. With yearend
approaching, low trading volume is expected and any rally might be
|Resistance: $ 1256, $ 1277, $ 1290 Support: $ 1378, $ 1262, $ 1251|
Traders Notes: Flat for now. Short only at $ 1180 targeting $ 1165, $ 1155 and $ 1145 area.
|Short Term (1 - 3 weeks)||Medium Term (1 - 3 months)||Long Term (6- 12 months)|
|Bearish $ 1210||Bullish - $ 1408||Target $ 1500 / $ 1600|
Silver Technical Outlook
We previously commented that “Silver market look set to continue trading at such low level but reaching a certain stage of consolidating after the sell-off. It could be too early to tell if a bottom is in and the white metal will be at the mercy of the next price movement in gold. Otherwise, we could see a delayed effect on silver prices. Given the “confidence” in the current market place, it is a mystery that silver prices remain subdued.”
the meantime, we will stick with the above commentary. The next
support is previous low at $ 18.86 and failure to hold on to that
will spark further round of selling and hard liquidation. Downtrend
channel line remains intact and will continue to drive the prices
lower for now. Only a break above $ 21.98 can spark further buying to
retest resistance at $ 25.65.
|Resistance: $ 21.05, $ 21.40, $ 21.80 Support: $ 19.85, $19.35, $ 18.85|
Traders Notes: Risky long at $ 19.45 with a 30 cents stop loss.
|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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25 Nov 2013 | Categories: Gold