Gold & Silver; Welcome September
Today we expect lacklustre trading activity as the US market is close with their long weekend holiday. However, we expect a busy week and month as traders are back from their summer break. Most traders will either take cue from the up and coming economic data. The subject on Tapering will be the headline for the Federal Reserve meeting on the 17th - 18th September. US dollar index has also garnered some buying interest and reaction from the equity market may increase volatility in the market. Trade wisely and carefully, expect the least expected with geopolitical concern in the background to be considered as well.
Economic data
that we will be watching closely this week are:
USD - ISM
manufacturing Index (exp. 54.5 / pre 55.4)
GBP - Service
PMI (exp. 59.0 / pre 60.2)
USD - Trade
Balance (exp. -38.2B / pre -34.2B)
USD - ADP
nonfarm employment (exp. 187k / pre 200k)
GBP & EUR -
Interest Rate Decision (unch)
USD - Nonfarm
Payrolls (exp. 175k / pre 162k)
Gold Technical Outlook
Daily
Chart
Gold
is trading within a healthy uptrend channel line as shown on the
chart below. Only a break and close below $ 1353 will allow the bears
more control to retrace lower and test previous outbreak level at $
1275 area. As long as gold trade above $ 1353, the longs will keeps
the trend going.
| Resistance: $ 1434, $ 1445, $ 1475 Support: $ 1393, $ 1371, $ 1353 |
Traders Notes:
Short at $ 1345 stop $ 1353 target $ 1300. Long
at $ 1355 stop at $ 1348 target a rebound to $ 1430.
| Short Term (1 - 3 weeks) | Medium Term (1 - 3 months) | Long Term (6- 12 months) |
| Bullish - target 1475 | Bearish - target 1353 | Target $ 1500 / $ 1600 |
Weekly
Chart
The
concern for the gold bulls is the potential end to this corrective
rally. Last week close shows a weak candlestick formation which could
suggest potential reversal. The stochastic fast line is reversing
lower while the RSI hit resistance at the 50 mark. MACD may have
crossed a tad higher but it is still rolling in the negative zone. If
gold managed to close higher ($ 1422 - $ 1430), a retest of
resistance line at the weekly 200 DMA - $ 1472 is in the cards,
followed by a possible pullback. The weekly chart remind us that gold
continue to trade in a Bear market and only a substantial break above
$ 1500 to call the end of the correction in the Bull market.
Silver Technical Outlook
Daily Chart After a successive rally, silver look poised to pullback and the daily chart painted a very nice setup for the white metal to retrace lower. Previous close after a blown-off scenario at $ 25.12 has given the signal for profit taking followed by shorting the metal. Pullback to retest support at $ 23.00 or lower could be in the cards. The MACD is about to cross lower and the volume confirms a falling demand as prices set to see more pullback. RSI has also crossed lower and has got more rooms to the downside. The stochastic fast line has already crossed lower while the slow line is still holding on.
Potentially, a
break below $ 22.25 will complete a head and shoulder pattern in the
next few weeks ahead. We have the left shoulder and the head is
complete but a right shoulder could be in the making.
| Resistance: $ 25.12, $ 25.40, $ 26.79 Support: $ 23.70, $22.80, $ 22.20 |
Traders Notes:
Short on a break of $ 23.60 target $ 23.20, $ 22.80 and $ 22.60
| Short Term (1 - 3 weeks) | Medium Term (1 - 3 months) | Long Term (6 - 12 months) |
| Consolidating | Expect consolidation to retest support at $ 22.70 | Bullish - a potential bull run? |
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indicates investment purpose. Opinions
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02 Sep 2013
