Gold and Silver charts: bears back on top


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Gold chart pattern

The daily bar chart pattern of Gold appears to have formed a bearish pattern of ‘lower tops, lower bottoms’ during the past two months. However, bulls need not lose heart just yet.

Why? A couple of technical reasons: (1) Gold’s chart indicates formation of a large ‘cup and handle’ pattern – with a possible upward breakout above 1350; (2) The past 2 months’ trading has formed the ‘handle’, which itself is looking like a ‘falling wedge’ from which the likely breakout is upwards.

There is an important caveat. Gold’s price had dropped below its 200 day EMA into bear territory, and touched a low of 1266 on Apr 23 before recovering a bit. A fall below 1260 – which is at the mid-point of the ‘cup’ – can negate the ‘cup and handle’ pattern.

Daily technical indicators are looking bearish. MACD is facing resistance from its falling signal line in bearish zone. RSI is below its 50% level. Slow stochastic has emerged from its oversold zone, but its upward momentum has stalled.

After touching a high of 98.10 on Apr 26 – its highest level in 2 years – the US Dollar index has slipped below 97.50 on Apr 2. Gold’s price tends to move in the opposite direction to the Dollar index.

On longer term weekly chart (not shown), gold’s price bounced up after receiving support from its 200 week EMA, and closed above its three weekly EMAs in long-term bull territory. Weekly technical indicators are looking bearish. MACD is falling below its signal line in bullish zone. RSI is seeking support from its 50% level. Slow stochastic has fallen inside its oversold zone, and can trigger a technical bounce.

Silver chart pattern


The brief foray into bull territory during the first two months of the year appears to have come to an end for the daily bar chart pattern of Silver

Silver’s price has formed a bearish pattern of ‘lower tops, lower bottoms’ and is trading below its three EMAs in a bear market. Throughout April ’19, silver’s price faced resistance from its 50 day EMA, and fell further below its falling 200 day EMA.

Daily technical indicators are in bearish zones. MACD has merged with its signal line. RSI is below its 50% level. Slow stochastic has emerged from its oversold zone, but not showing much upward momentum.

On longer term weekly chart (not shown), silver’s price faced resistance from its 20 week EMA, and closed below its three weekly EMA in a long-term bear market. Weekly technical indicators are looking neutral to bearish. MACD is in neutral zone. RSI is moving sideways below its 50% level. Slow stochastic has entered its oversold zone. Some more correction is possible.

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