Simple Moving Average(SMA) 50-period (red), 200-period (bold, gray)
RSI-14 with Simple Moving Average 5-period of RSI attached.
Elliott Wave Principles
Market and Price Action (patterns, candlesticks)
Intraday pivots and Intermediate-term support and resistance
Multiple Time-frame Analysis
- Gold has been in a rally since the end of January, pushing pass 61.8% retracement of the decline that started January 13, and stuck at 50% of the decline since the start of the year.
- The next cluster seen in the 4H chart is the 1375-1380 area.
- This is the level the market has in sight if the current decline is supported by the rising channel.
- On the other hand, if the market is respecting the 200SMA in the 4H chart and breaks below the channel, it might be heading back down to test the 1309 low.
- A break below this eyes the 1295 area (50% retracement and 200SMA in the daily).
- The 1265 level is the lowest I have for gold at the moment because this is an important pivot in 2010. It was an important resistance level, and now would be a significant support level to accompany the fibonacci retracement level of 61.8%.
- This scenario can either come now if the corrective rally is over, or perhaps after another rally attempt.
- Compared to Gold, Silver's corrective rally has been more aggressive, and the prospect of further decline is lesser.
- The 4H chart shows the RSI break above 70 though market action has not clearly broken above 78.6% retracement, so this could still be a deep corrective rally.
- The lack of convincing trending signals suggest we are still in a ranging mode.
- If the market stays within the rising channel seen in the 4H chart, there is a positive reversal signal pointing towards the 30.90 area with a swing projection.
- A break below the channel however only suggests a decline first to 28.80 area. A break below that looks at the 28.00 pivot. Only a break below that suggests a test of 26.50, and only a break below 26.50 opens up 25.00 as the next target.
- In this ranging mode, with bullish momentum, it is more likely that silver will be testing its 2010 high of 31.20.
Are the bulls still in control of gold and silver? We would love to hear what you think.
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Fan Yang CMT
Chief Technical Strategist