Gold and Silver charts: bulls staging a come back?


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Gold chart pattern

The following comment appeared in the previous post on the daily bar chart pattern of Gold: The past 2 months’ trading has formed the ‘handle’, which itself is looking like a ‘falling wedge’ from which the likely breakout is upwards.”

Note that gold’s price twice dropped below its 200 day EMA into bear territory, but formed a small ‘double bottom’ reversal pattern. That triggered a technical bounce that has broken out above the ‘falling wedge’ (which is the ‘handle’ of a ‘cup and handle’) pattern.

A strong volume surge accompanied the upward break out – validating it technically. Gold’s price managed to close above the 1300 level, and well above its three EMAs in bull territory after a month. 

Daily technical indicators are looking bullish. MACD is rising above its signal line in bearish zone. RSI is climbing above its 50% level. Slow stochastic has entered its overbought zone, and can trigger a pullback towards the top of the ‘wedge’.

After touching a high of 98.10 on Apr 26 – its highest level in 2 years – the US Dollar index dropped to a low 96.80 on May 13. Gold’s price usually moves 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 giving conflicting signals. MACD is moving sideways below its falling signal line in bullish zone. RSI is rising above its 50% level. Slow stochastic has emerged from its oversold zone, and can trigger a rally.

Silver chart pattern


The daily bar chart pattern of Silver had formed a ‘double top’ reversal pattern back in Feb ’19, and has been in a down trend (marked by purple trend line) since then.

A couple of recent attempts to break out above the trend line and the falling 20 day EMA have come to nought. Silver’s price is trading below its three falling EMAs in a bear market.

A silver lining for bulls is the formation of a small ‘double bottom’ reversal pattern near the 14.60 level. Whether the support at 14.60 holds or not remains to be seen.

Daily technical indicators are in bearish zones, and not showing any upward momentum. MACD has merged with its signal line. RSI is moving sideways below its 50% level. Slow stochastic has dropped below its 50% level after briefly moving above it.

On longer term weekly chart (not shown), silver’s price is trading below its three falling weekly EMAs in a long-term bear market. Weekly technical indicators are in bearish zones and showing downward momentum – suggesting some more correction. 

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