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Gold & Silver; Stagnant before COMEX option expiry

Traders remain cautious to place any significant position as we approach the end of the month. Economic data that are due next week could increase market volatility and staying on the side line remains the best policy. Precious metal market remains lacklustre with no real conviction among investors. Physical demand continues to dwindle while outflow in ETF continues. Meanwhile, gold and silver failed to capitalize on bullish data and seems to suggest that bearish sentiment prevail. Both metal faced further pullback and previous low looks to be a viable target. Expect more range trading between $ 1310 to $ 1336 area and we are not expecting any major move until certain support or resistance give way.

Gold Technical Outlook

Daily Chart
Gold opened at $ 1328 but selling pressure forced the yellow metal to revisit $ 1313 again. Technically, it looks oversold in the short term but the daily and weekly chart indicate further weakness ahead. The outlook remains weak and further pullback looks imminent. Meanwhile, the Bollinger band is turning lower - which capped the potential upside at $ 1376 at the moment. A break and close below $ 1313 means that a retest of $ 1290 is next followed by $ 1275. Should gold break below $ 1275, previous low at $ 1180 seems highly probable.

Resistance: $ 1434, $ 1455, $ 1525 Support: $ 1278, $ 1210, $ 1180

Traders Notes: Short only if it break $ 1290 level. Going long on a break above $ 1380 - the target will be previous high.

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

Daily Chart
The technical outlook remains bearish as silver trade within the larger downtrend channel and the current price action remains corrective in nature. Next support stands at $ 20.84 which is 61.8% of the retracement from June low to August high. Should that support give way, the white metal could easily revisit its previous low. The daily RSI is below 50 but has not reached the oversold territory. In addition, the MACD line struggle to cross above the signal line. Daily candlestick also shows an evening start formation which suggests a bearish reversal pattern. Therefore, we envisage further selling and a possible test of $ 20.25 area.

Resistance: $ 23.45, $ 23.90, $ 24.53 Support: $ 21.40, $20.80, $ 19.50

Traders Notes: Looking to short if it break and close below $ 21.30.

Short Term (1 - 3 weeks) Medium Term (1 - 3 months) Long Term (6 - 12 months)
Possible retest of $ 20.60 area Bearish $ 20.00 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. 

25 Sep 2013

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