Gold & Silver; On Cloud Nine Temporarily
2014 proved to be a tricky year as economic leaders try to power through with a significant cut in monetary policy. The reign has been transitioned from cutting down debt, lower unemployment and stabilise the so called recovering economy. Damage was done and now with the economy on the mend, consumer demands are expected to pick up. Rise in house prices and strong indication from central bank on a possible interest rate has made those in charge concern about the speed of rising prices. Withdrawing some of that purchasing power is essential before the economy heat faster and start the same spiral of death. After 6 years of the economic recession, economists and banks remain cautious. It was so different compared to the early 2000 as they were previously on the giddy level of cloud nine. The difference this time is that the wound is still fresh and vigilance is paramount.
With the RSI at 61, there are enough room for the bulls to power through the next set of resistance at $ 1400 and $ 1422 area. Weekly MACD remains positive as it could cross above the neutral zero mark which was last seen in February 2013. Vivid memories as the long pulled out of the market in droves and hedge fund added their short trade. Paulson and Co faced the prospect of being the victim of his own success. Soros laughing as he leave the circus before the sh*t hits the fan. The bear market has reigned over 2013 with huge ripple across the precious metal market. Meanwhile, stock market acted as the substitute with investors taking a driving seat until the later part of 2013. Stock markets celebrated all time high as we enter 2014 but that could change soon.
|Resistance: $ 1355, $ 1367.50, $ 1377 Support: $ 1286, $ 1293, $ 1308|
Traders Notes: Caught wrong to short the market. Make or break now with $ 1400 in sight.
|Short Term (1 - 3 weeks)||Medium Term (1 - 3 months)||Long Term (6- 12 months)|
|Bearish $ 1278||Bullish - $ 1387||Target $ 1422|
Silver Technical Outlook
Silver seems to take a pause and serious second look higher as gold
managed to continue its bullish momentum. Pressure from falling
copper and other commodities that signal economic growth as well as
growing pressure that the world economic power is facing a potential
slowdown dampened silver. The break lower was justified and we stick
to our view that prices should retraced before advancing higher. Main
concern only lies on the long term downtrend line that will continue
to build pressure.
|Resistance: $ 21.85, $ 22.20, $ 22.45 Support: $ 19.50, $ 20.77, $ 21.05|
Traders Notes: Advance capped by long term downtrend line.
|Short Term (1 - 3 weeks)||Medium Term (1 - 3 months)||Long Term (6 - 12 months)|
|Flat||Flat||Bullish - a potential bull run?|
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14 Mar 2014