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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

Weekly Chart

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.

Take 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 short lived.

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

Weekly Chart

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.”

In 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?

This article is written according to the author’s views and by no means indicates investment purpose. Opinions expressed at Sharps Pixley Ltd are those of the individual authors and do not necessarily represent the opinion of Sharps Pixley Ltd or its management, shareholders, affiliates and subsidiaries. Sharps Pixley Ltd has not verified the accuracy of any claim or statement made by any independent writer and is reserved as their own and Sharps Pixley Ltd is not accountable for their input. Any opinions, research, analysis, prices or other information contained on this website, by Sharps Pixley Ltd, its employees, partners or contributors, is provided as general market commentary and does not constitute investment advice. Sharps Pixley Ltd will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information. The data contained on this website is not necessarily real-time or accurate. 

25 Nov 2013 | Categories: Gold

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