The daily bar chart pattern of Gold consolidated sideways within a ‘rectangle’ pattern for almost 8 weeks before breaking out upwards with a strong volume surge on Oct 11.
After a pullback to the top of the ‘rectangle’ the following day, gold’s price rose to test resistance from the zone between 1240 and 1250. It has been consolidating sideways above its 20 day and 50 day EMAs, but remains below its falling 200 day EMA in a bear market.
A dip in the US Dollar index to 94.50 possibly triggered the upward breakout. The Dollar index has since moved above 95.50, putting a lid on gold’s price.
Daily technical indicators are in bullish zones but not showing upward momentum. MACD is above its signal line but its up move has stalled. RSI is sliding down. Slow stochastic is about to drop from its overbought zone. Expect some more consolidation in the zone between 1220 and 1240.
On longer term weekly chart (not shown), gold’s price crossed above its 20 week EMA intra-week, but closed just below it, and well below its 50 week and 200 week EMAs in long-term bear territory. Weekly technical indicators are turning bullish. MACD formed a ’rounding bottom’ pattern and crossed above its signal line in bearish zone. RSI has moved up towards its 50% level, but is not showing upward momentum. Slow stochastic has risen sharply above its 50% level.
Silver chart pattern
The daily bar chart pattern of Silver moved above its 20 day and 50 day EMAs, but retreated after touching a lower top. Since the beginning of the month, silver’s price has been consolidating sideways within a ‘triangle’ pattern.
Volumes have been stronger on recent down days. In case of an upward breakout from the ‘triangle’, the zone between 15.0 and 15.2 can provide strong resistance.
Since a ‘triangle’ is an unreliable pattern, a downward breakout and a test of the Sep ’18 low can’t be ruled out. It would be prudent to wait for the breakout before taking any buy/sell decision.
Daily technical indicators are in neutral zones and showing downward momentum. MACD is above its signal line and moving sideways. RSI is seeking support from its 50% level. Slow stochastic is moving down towards its 50% level. Expect some more consolidation in the zone between 14.4 and 15.0.
On longer term weekly chart (not shown), silver’s price closed well below its three falling weekly EMAs in a long-term bear market. Weekly technical indicators have remained in their respective bearish zones after correcting oversold conditions.
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