SHARPS PIXLEY Gold and Silver Daily Predictions
Gold
Short Term: Gold ended the week on a positive note but again failed to break 1700 which we last mentioned. Gold initially rose to 1695.05 and no significant follow up buying which raise caution. Next week, we could see gold testing for support around 1675 and 1669 area again before a clear run up. 4 hour chart shows buying pressure is easing after a good run from this month’s low of 1635. We look to short the market at 1678 with a target at 1670 to 1665 area (accompanied by a tight stop loss). The order will be invalid if prices move higher than 1700.
Medium Term: There are still potential for prices to test 1700 by next week with option expiry as well as increase buying interest in gold ETFs. Weekend rumour has it that gold price is determined by the Chinese economy. Our thoughts spans out to the more troubling area such as the potential island dispute between Japan. Japan continuous claim on the island has escalated a possible war. We look for gold to break 1703 and target the higher end of 1735. Otherwise, gold may take another breather and in search of support before moving higher. We heed caution as the daily chart signals some indecision and possible selling pressure.
For now we monitor the current development and could well short the market. A break of 1700 would give it room to test 1715 area but caution remains as it failed to break 1700 after all.
Silver
Short Term: For the short term, we look for silver to consolidate its current gains. Silver rose to a high of 32.14 but unable to hold on. Upon reaching the top of the Bollinger band it came down and it seems another breakout is possible. The signal shows prices may well consolidate further but some weakness could appear if silver break below 31.60 area. At the moment, staying on the side line could be a better option for us to study where we can enter this volatile market again.
Medium Term: The recent development on the daily signal shows lack of buying momentum on silver. However, we do not want to discount the fact that there is a huge inflow on silver ETFs that may significantly lend support on the current prices. At the moment, we are still bullish unless silver turn back below 31.00.
Staying on the side line and watching the development on silver prices. Looking to buy again on the dip.
Economic Views
| Currencies | Value | Change comment |
| Euro | 1.332 | Concerns are escalating regarding Cyprus bailout while Spanish bond is on the rise again. |
| AUD | 1.0508 | Australian dollar seems to hold up well after the Chinese GDP. |
| JPY | 90.00 | Weekend news remain positively to make the Yen weaker possibly 90 - 95 before some sign of abating. |
| US Index | 80.03 | The strong US dollar put a brake on gold and silver rally. |
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Robert Jilles
Sharps Pixley, London
www.sharpspixley.com
