Commodities webinar

Gold/Silver ratio at a pivotal level. Which precious metal will make the move

Gold 5 minutes to read
KCL
Kim Cramer Larsson

Technical Analyst, Saxo Bank

Gold is struggling to resume uptrend hitting resistance. Silver testing long term Bull/Bear pivot level around $21.35. Gold/Silver forming symmetrical triangle corrective pattern, break out could be imminent.

Gold spot (XAUUSD)
is trading in a slightly rising trend hitting resistance at the 61.8% retracement of the November sell-off at around USD 1.830/oz. RSI showing bullish sentiment and no divergence indicates Gold is likely to penetrate the resistance.
A break below USD 1.782 could ignite further selling down to around 1.725

Gold D Jan 2
Source: Saxo Group

On the bigger picture on weekly time period Gold seemed to have been range bound between 1.668 and 1.900 but is now trading in a more and more narrow band forming what looks like a Symmetrical triangle. No clear direction but RSI in bullish sentiment indicates break out could be to the upside and imminent.

Gold W Jan
Source: Saxo Group

Silver spot (XAGUSD) seems to run out of steam before even testing resistance at around USD23.45/oz. The precious metal needs to break above the resistance to get upside momentum.
RSI is still showing negative momentum and needs to close above 60 to reverse that.

Silver D Jan
Source: Saxo Group

On weekly time periods Silver seems to be forming a Descending triangle like pattern with strong support at around USD 21.65/oz.
If Silver breaks above short term resistance at around USD21.45/oz the falling trend line in the triangle is likely to be tested. Strong resistance at around USD 25/oz

Silver W Jan
Source: Saxo Group

Zooming out a bit further on Silver we can see that price level around USD21.35 seems to be pivotal for up or down trend. Currently price is hovering around above the “Pivot” line. Strong support at USD13.65 and strong resistance around USD30. The underlying sentiment is bullish with both 55 and 200 monthly SMA’s rising and RSI showing bullish sentiment indicating next move could be in upwards direction. But keep an eye on the “pivot” line

Silver M Jan
Source: Saxo Group

The Gold/Silver Ratio (XAUXAG) seems to be forming a corrective symmetrical triangle on the short term daily time period. With RSI being bullish and no divergence break out direction is indicated to be up.

XAUXAG D Jan
Source: Saxo Group

If that scenario plays out XAUXAG keeps it medium term rising trend as illustrated on the weekly time period where the ratio seems to be trading in a rising channel. Strong resistance at around USD 82.40. A level that seems to be a bull/bear pivot similar to what can be seen on Silver spot.

XAUXAG W Jan
Source: Saxo Group

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