Gold & Silver Weekly; Equity All Time High Justification
Rising equity market can only mean one thing and that is rising confidence among investors as well as directors in the future of the economy. Investment in the equity market is usually made strategically, to fit the long term goals of higher return on the back of a strong economy and continued growth. We have in many instances questioned where this real growth is and whether it is really coming. This is not the first time that we disagree with the current bubble-like equity market. On the other hand, speculators and short term investors cheered on every occasion that equity rose to all time high. Meanwhile, we can only picture what the situation will look like once the sugar-rush music stops.
Gold Technical Outlook
bulls are facing uphill struggle given the low volume and interest in
holding safe haven assets. Hedge Fund managers continued to push and
divert investment into the equity market where promises of bigger
return can be seen. With reduced financial and economic uncertainty,
the QE-fuelled gold price is coming down to earth.
continue to see lower gold prices as we approach the end of 2013 with
various positioning as we enter 2014. Should the support at $ 1225
and $ 1200 failed to hold, the previous low at $ 1180 will be the
next target with a potential low of $ 1100 as per our last
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 $ 1110||Bullish - $ 1408||Target $ 1500 / $ 1600|
Silver Technical Outlook
The silver market is biding its time as it made its way lower. We are waiting for a positive divergence in the weekly chart with a possible new low before corrective rebound. 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.”
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
|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 (failed to reach the buy we set)
|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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02 Dec 2013 | Categories: Gold