Technical Technical Technical

Technical Update - Gold & Silver sell off exhaustion?

Commodities 5 minutes to read
KCL
Kim Cramer Larsson

Technical Analyst, Saxo Bank

Gold spot XAUUSD is testing 0.764 Fibonacci retracement and $1,850/troy oz support. A correction is not unlikely which could take XAUUSD back to around 1,900-1,920
However, RSI is below 40 threshold and Bollinger bands still expanding indicating we could see lower levels. A move below $1,844 is likely to fuel another sell off. However, a quick dip below support to test and bounce off of rising lower trendline is not unlikely.

Source: Saxo Group

Weekly chart the collapse after triangle break out could test both trend lines in the triangle. If Gold breaks below both trend lines and especially the falling one selling pressure could extend below 1,800. However, when you see more than one or sometimes a cluster of Fibonacci levels it indicates strong support/resistance. 1,830 seems to be a strong support combined with the two triangle trend lines.

Source: Saxo Group

The price collapse in Silver spot XAGUSD seems to be close to exhaustion. The precious metal is close to $22 support. RSI is at an extreme below 20 and at a level where Silver price several times have bounced off of.
The spike yester yesterday  (long lower shadow on the candle) could have been the exhaustive bear move and a correction to around 23.50 over next week or so is not unlikely.

Source: Saxo Group

Weekly chart illustrates the strong support area around 22.00-21.60 from where Silver is likely to bounce. However, if it experience a weekly close below thios strong support area the technical rebound picture is totally demolished and reversed

Source: Saxo Group

The Gold/Silver ratio XAUXAG has moved 0.618 of the peak to trough distance of the symmetrical Triangle after break out. (the two green arrows are identical in length). The ratio has been rejected at the 0.618 projection at $84. Further set back should be expected. Support at around 81. i.e. 0.382 Fibo retracement of the break out move.

Source: Saxo Group

Longer term the Gold/Silver is trading in a broad slightly rising channel. Indicating more upside is not unlikely.

Source: Saxo Group
Disclaimer

The Saxo Bank Group entities each provide execution-only service and access to Analysis permitting a person to view and/or use content available on or via the website is not intended to and does not change or expand on this. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to Saxo News & Research and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to Saxo News & Research is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on Saxo News & Research or as a result of the use of the Saxo News & Research. Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. Saxo News & Research does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws.

Please read our disclaimers:
- Notification on Non-Independent Investment Research (https://www.home.saxo/legal/niird/notification)
- Full disclaimer (https://www.home.saxo/en-hk/legal/disclaimer/saxo-disclaimer)

Saxo Capital Markets HK Limited
19th Floor
Shanghai Commercial Bank Tower
12 Queen’s Road Central
Hong Kong

Contact Saxo

Select region

Hong Kong S.A.R
Hong Kong S.A.R

Saxo Capital Markets HK is a company authorised and regulated by the Securities and Futures Commission of Hong Kong. Saxo Capital Markets HK Limited holds a Type 1 Regulated Activity (Dealing in securities); Type 2 Regulated Activity (Dealing in Futures Contract) and Type 3 Regulated Activity (Leveraged foreign exchange trading) licenses (CE No. AVD061). Registered address: 19th Floor, Shanghai Commercial Bank Tower, 12 Queen’s Road Central, Hong Kong

By clicking on certain links on this site, you are aware and agree to leave the website of Saxo Capital Markets, proceed on to the linked site managed by Saxo Group and where you will be subject to the terms of that linked site.

Apple, iPad and iPhone are trademarks of Apple Inc., registered in the US and other countries. AppStore is a service mark of Apple Inc.

Please note that the information on this site and any product and services we offer are not targeted at investors residing in the United States and Japan, and are not intended for distribution to, or use by any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation. Please click here to view our full disclaimer.