Gold & Silver; Correction Watch
Several supportive factors on why the price of gold has risen:
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
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
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|
|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?|
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24 Oct 2013 | Categories: Gold