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Gold & Silver; Where is the Chinese Demand?


Chinese Whispers on a potential strong demand from mainland China. That demands remain elusive and countered with further selling. Technically, the yellow metal is oversold but with prices will remain weak if there is no spark of buying frenzy. It remains doubtful if there are any demands that could bump the price of gold higher. Shorting the yellow metal seems to be the better option as traders look into the next quarter with rising interest rate from central banks. Continued straining of monetary policy will play a key role in the demand to buy gold as an inflation hedge. However, concern remains on deflationary pressures that are building up in Europe. For all we know, the turbulent Japanese economy could play a nasty part to destabilise the global economy should Abenomics failed to raise that inflation rate.

Gold Technical Outlook
Weekly Chart

The next solid support on gold should it break $ 1266 will be $ 1244 area. Failure to hold that will indicate further selling and a return to $ 1180. Unless it can break above the downtrend line, our current projection remains to the lower end of $ 1100. The current price at $ 1285 needs to build a few more layers of support and only a retest of $ 1276 will give the bulls some confidence. Another retest at lower numbers, $ 1277 or $ 1266 may be the opportunity for bargain hunters to enter the market. Further buying at $ 1295 will then allow the bulls to break higher to retest $ 1330 area.

Resistance: $ 1300, $ 1329.50, $ 1355 Support: $ 1244, $ 1266, $ 1278


Traders Notes: Buy on support at $ 1271 stop at $ 1261 target $ 1292

Short Term (1 - 3 weeks) Medium Term (1 - 3 months) Long Term (6- 12 months)
Bearish $ 1255 Bearish $ 1200 Target $ 1550


Silver Technical Outlook
Weekly Chart

Silver is building some solid support at $ 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.

Resistance: $ 20.09, $ 20.50, $ 21.48 Support: $ 19.50, $ 19.67, $ 19.77


Traders Notes: Should the price stabilise and found support at $ 19.50, buy with a stop loss of $ 0.30 to target the downtrend line at $ 21.40.

Short Term (1 - 3 weeks) Medium Term (1 - 3 months) Long Term (6 - 12 months)
Flat Flat 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. 

07 Apr 2014 | Categories: Gold

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