Technical Update - Silver testing key resistance. Gold back above 1,680, will it continue higher?
Kim Cramer Larsson
Technical Analyst, Saxo Bank Group
Silver leading the way higher testing key resistance at $21. Can it break it and build bullish trend?
Gold back above key resistance at 1,680 and is close to testing falling trend line. Several resistance levels must be broken for Gold to turn bullish.
Gold/Silver ratio has collapsed and is trying to find solid ground around 82.20, but bears are in control
Gold spot closed yesterday back above the key resistance at $1,680 close to testing the falling trend line in its falling channel.
If Gold breaks above the trendline there is resistance at the 0.618 retracement of the recent down trend from August at around 1,734 and at the 0.786 retracement at 1,766.
Major key resistance it at around 1,808. A close above that level is likely to signal a major trend reversal in Gold i.e., up.
On the weekly chart the Double Top pattern was confirmed by the close below 1,680 with a potential target of at least 1,445. However, the current Pullback back above 1,680 indicates the pattern could be busted. If Gold closes above 1,808 the double top pattern must be considered busted.
If Gold closes back below 1,680 downtrend is likely to resume and the double top pattern target is in play.
Silver spot jumped back above $19 which seems to the Bull/Bear Pivot. Testing key resistance around $21. If Silver closes above 21 a move to the 200 daily SMA and a test of resistance at 22.51 is in the cards.
RSI has closed above 60 supporting the bullish outlook. However, if Silver collapses and closes back below 19 bear trend is likely to resume
Gold/Silver ratio has collapsed down to the 55 and the 200 weekly SMA’s, and the lower rising trendline. Currently trading a few cents below the support at 82.20. Down trend has been confirmed (lower lows and lower highs).
If the ration breaks below the trendline key support at the 0.618 retracement at 75.25 is likely to be reached. If RSI, which showed divergence at the August peak thus warning of a weakening of the uptrend, closes below 40 it supports the bearish picture.
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