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Gold & Silver; Correction Watch

Several supportive factors on why the price of gold has risen: 

1) Tapering failed to happen and might not happen this year due to potential economic risk on US debt ceiling spill over.
2) Weak US dollars made many short sellers jumping for the yellow metal.
3) Investors are buying gold as insurance.
4) Stock market is rallying hard on the back of further easing which help the metal.
5) Gold been sold since 1420 and short sellers have tried and failed to take it down to 1180 so it’s time to uncoil and go up before it could try lower again.
6) Physical demand from Asia is driving higher prices and paper selling is under pressure.

Gold Technical Outlook

4 hour Chart
The chart below clearly shows how sellers continue to dominate ever since the end of August. As gold recovered, a break above $ 1300 gave the bulls some confidence and short sellers unwind their positions. The selling is giving way as price break above the blue channel line. However, these advances may be short lived because the RSI failed to make new high despite higher gold prices. Should the dollar strengthen, we felt that gold will lose some of its momentum to retrace lower before trying higher again.

Resistance: $ 1344, $ 1375, $ 1434 Support: $ 1309, $ 1292, $ 1252

Traders Notes: Possible short from $ 1353 with a target price at $ 1317. Otherwise, buy if it retrace back to close previous gap at $ 1296 area.

Short Term (1 - 3 weeks) Medium Term (1 - 3 months) Long Term (6- 12 months)
Cautiously bullish - $ 1438 Bearish - $ 1215 Target $ 1500 / $ 1600

Silver Technical Outlook

4 hour Chart
Once again, the chart paints a clear picture that a bottom is in and a double bottom in the making. The break above the blue channel line and retest on the pullback gave bullish indication. With gold higher, silver pushed on and we are seeing some short sellers unwinding their positions. Daily chart paints a possible bull run but we will be cautious as we enter the end of the week and month soon.

Resistance: $ 23.45, $ 23.90, $ 24.53 Support: $ 21.40, $20.80, $ 19.50

Traders Notes: Should the blue channel line get tested on a possible pullback then we recommend readers to go long.

Short Term (1 - 3 weeks) Medium Term (1 - 3 months) Long Term (6 - 12 months)
Possible retest of $ 20.60 area Bullish to test $ 24.80 area 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. 

24 Oct 2013 | Categories: Gold

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