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Gold & Silver; Tell Tale Sign

An increase demand of precious metals in Asia is of no surprise. With a much stronger economy where global leaders will have to learn to accept, China holds a growing number of wealthy individual. Not only do they have great demand to protect their wealth in various investments such as properties, the precious metals hold in high esteem among the elites to invest in. Pressure is building on the Chinese Yuan to appreciate and with each appreciation; inflation rate in China will continue to be a battle for the communist government. Why do you think overseas properties are on the rise in value? There is just too much paper money in this world for the top elite to spend on. Distribution of wealth by the government will remain a struggle.

Meanwhile, the western economies promised a better economic picture. Depressing figures and fighting crisis is now a thing of a past. Maintaining the current going rate could soon be a tough challenge, despite the constant promises of better numbers.

Gold Technical Outlook

Weekly Chart

Short term view on the yellow metal remains positive as long as a retest of last week low holds. Failure to hold on the low could spell trouble where the bears can take the metal to a low of $ 1268 and $ 1255. Only a break pass $ 1305 and follow up buying could encourage further demand. A break pass $ 1321 will help transpire the fact that a coiled up run higher is in store. However, we do not see an easy ride to a higher number at the moment. Instead, we see a rather turbulent slump as it break out of the corrective triangle formation.

Traders Notes: Buy at $ 1286 stop at $ 1277 target $ 1307. Looking to short gold as it draw closer to $ 1316 area to target the low.

Silver Technical Outlook

Weekly Chart

The white metal is our preferred metal to break higher as global outlook in the next 3 to 6 months could soon pick up. A stronger demand in copper and other base metals from China may provide that needed support and allow the price to break higher to the $ 21.00s. It is crucial that silver can continue to eke out support around the $ 19.55 to $ 19.75 area. A sudden surge in demand could see prices rising higher and retest several key resistances. However, prices will remain capped in this downtrend line but we see higher prices in the next few weeks once the moving average crossed higher. Prices need to dictate this pace first as we have seen in many occasions that it has failed to materialise.

Traders Notes: We closed our long position after the white metal struck a low of $ 19.36 and had a reversal to $ 19.80 area, followed by a deeper correction.

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.

30 Apr 2014

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