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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

Weekly Chart

Gold 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. We 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 commentary.
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

Weekly Chart

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 $ 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 (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?

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. 

02 Dec 2013 | Categories: Gold

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