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Gold & Silver; Equity All Time High vs Falling Commodities = GROWTH?


Despite continued talks on tapering, the equity market is not ready to dive head first. Mass buying continues as the hot money from central banks work their way to all time high. Bubble like conditions was mentioned a couple of times among hedge fund analysts and well known economist but market will remain irrational for as long as it can. Others said trade the fundamentals, while the rest are left wondering what fundamentals?

However, the others felt that a virtual currency such as Bitcoin seems like a better alternative compared to the “rigged” safe haven market. Losing the safe haven status in gold and silver seems a little too odd but investors are accepting and increasing their trust in virtual currencies that have limited supply. Everyone has a choice and it seems that certain investors like the risk reward for a full blown out rise in Bitcoin. Why hold paper money when central banks are constantly printing? Why hold gold and silver when the sentiments are so negative? Why put money in stock markets when uncle and aunty across the road are inviting their friends to buy while they can? Bitcoin rules for now but not to infinity. Eventually the big bubble will burst and the real question is when.
We continue to feel that the equity market is heavily overbought and correction near to the end of the year sounds viable.

Gold Technical Outlook

Daily Chart
With the daily chart Bollinger band converging, a breakout is imminent in the next few weeks. Medium term prices will trade between the two bands until a certain breakaway happened with massive volume. The bears could take further control should we break below $ 1181 and the bull trend in gold will be considered over.

Resistance: $ 1296, $ 1306, $ 1318 Support: $ 1228, $ 1200, $ 1181


Traders Notes: Staying flat in this falling market - go long at $ 1305 only

Short Term (1 - 3 weeks) Medium Term (1 - 3 months) Long Term (6- 12 months)
Bearish target $ 1100 Slightly Bullish - $ 1315 Flat


Silver Technical Outlook

Daily Chart
A potential base is in the making but with a strong bias of another sell off due to the lack of buying interest.
Should the price regain to trade above $ 20.55 and close above that, we will set a buy to target previous support which is now resistance at $ 21.35.Despite upbeat economic data as well as growth expectation among the developed economies, silver failed to rally. So why is it that the white metal failed to rally on the back of better economic outlook? Weekly chart dominate with a strong bearish indicator as prices continue to trade in a downtrend channel.


Resistance: $ 23.25, $ 23.90, $ 24.53 Support: $19.05, $ 18.80, $ 18.20


Traders Notes: Look to place another long should prices breach above $ 20.15 with target at $ 21.15.

Short Term (1 - 3 weeks) Medium Term (1 - 3 months) Long Term (6 - 12 months)
Flat 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. 

06 Dec 2013 | Categories: Gold

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