Gold & Silver; Party Hard Before Dectaper
The sound of no tapering is almost so assuring to the global equity market as well as other asset bubbles that depends on the money printing programme to continue. It seems like a good time to question the real intention of the Federal Reserve in making loud noises and yet failed to show the goods. Given the amount of times it has attempted to send a “clear” message, traders and investors might as well ignore the FOMC statement given how irrelevant it has been. The current equity, commodity and currency market is dictated by hot money and speculators with one intention of keeping that bubble inflated. Meanwhile, Fed officials continue scratching their heads on what they could do to avert a potential hyperinflation in the near future without damaging the recovering economy. Some say recovery are wishful thinking at this stage and we argued that it is going to be a long hard road ahead as the world economy plod along the edge of recession, deflation and then a small recovery.
Gold Technical Outlook
Revising on the commentary we made last week: “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.”
simply advise on the facts that the market sentiment is shifting
given how oversold the dollar has been. The dollar index posted
higher as of the time of writing at 80.25, with the next resistance
standing at 80.76. Short term chart indicate an overbought condition
on the dollar but it is early days with a slight retrace before
another attempt higher. Given such scenario, we see gold moving lower
potentially to retest $ 1311 area and could go as low as $ 1293 area
if the dollar managed to squeeze to the next resistance. We advise to
go long should gold retest $ 1290 to $ 1303 area.
|Resistance: $ 1346, $ 1360, $ 1374 Support: $ 1309, $ 1292, $ 1252|
Traders Notes: Possible short from $ 1353 with a target price at $ 1317 (currently in transit with stop loss raised to $ 1328). Otherwise, buy if it retraces 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
We can only justify the fall on silver basis on the weekly chart analysis. Weekly analysis made a clear warning that the weekly chart versus the daily chart creates a dilemma on the direction that silver could go. Weekly chart dominate with a strong bearish indicator as prices continue to trade in a downtrend channel. Meanwhile, the daily chart gives a slight bullish indication that it could break higher. As per our warning last week, “Daily chart paints a possible bull run but we will be cautious as we enter the end of the week and month soon.”
continue to sit by our argument last week that “Daily
chart shows a potential run up to retest the channel line but weekly
chart shows that it is still trending in the bigger downtrend channel
that started since May 2011.”
We felt that silver prices could pull back a little lower before
continue to advance higher. Only if it break and close above $ 23.05,
then more upside can be considered at this stage.
|Resistance: $ 23.25, $ 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. Buy at $ 21.35 stop loss $ 20.55 target $ 23.50 again.
|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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01 Nov 2013 | Categories: Gold