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Gold & Silver; Imminent shift of sentiment?

Wall Street and hedge fund managers make money either way. No matter bull or bear, they are ready and have sharpened their knife for the next few rounds. The shift in gear is just the start as the mass public continue to suck into the belief that everything is fine now regardless of more debts and paper money printed to safe the economy since 2008. Hold on for a second though and rewind back to what goes us to the economic crash in 2008? It was subprime mortgage and massive borrowing which central banks are doing at the moment. So who exactly is going to pay for those borrowed money? Politicians and elected individuals set the current rules but future generation will pay.

The promise of current spending to pump and improve overall wealth can only be realised by few. As per our previous commentary “We continue to feel that the equity market is heavily overbought and correction near to the end of the year sounds viable.” Major stock market indices have shown its true colours as traders look to unwind their trade and lock in some decent profit. Rounds of positive economic data have stimulated talks of tapering in December 2014. With China joining the printing game, it is only a matter of time for the US to pass the baton to China. The Eurozone is taking a rather laissez faire approach as lending continue to tighten regardless of the low interest rate environment set by the ECB. 2014 will prove to be a tricky year as we get from not so good to bad and from bad to worse.

Gold Technical Outlook

Daily Chart
The bears failed to hit home below previous low as the bulls look set to defend key area and build further support above the psychological level at $ 1200. As long as gold trades above $ 1200, there is a chance for a corrective move higher with the first resistance at $ 1292 area followed by a possible 5 wave correction to a maximum of $ 1390 area.

Resistance: $ 1267, $ 1292, $ 1306 Support: $ 1228, $ 1200, $ 1181

Traders Notes: We are long from $ 1250 and only a break below $ 1222 will end the trade as we target this corrective bounce to meet resistance at $ 1303 area.

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
Trading silver market needs deep pocket which says a lot on its recent move as traders lock in some profit from the short selling. Short covering is expected but for how long? Should the price regain to trade above $ 20.15 and close above that, we will set a buy to target previous support which is now resistance at $ 21.35. 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. 

16 Dec 2013

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