Gold & Silver; Propelled Higher

With the price of gold rising back above $ 1300.00, the gold bulls are relieved and see this as an opportunity to push higher. The recent price action could well indicate that short sellers are busy unwinding their position as they see the lack of follow through selling. The market is thin and the big boys are away on holiday so trading direction could remain mix for some time. Taking a position in the range of 1290 to 1320 remains risky and most traders are waiting for a breakout so as to provide a direction to trade in. However, the short term remains biased to the downside for now.

Only if it breaks below 1273, then it will trigger more stop loss and could easily take gold to retest support at $ 1265 area and only a break below $ 1240 will warrant a revisit of $ 1210 area. On the other hand, if it can break above $ 1350 convincingly – we would not be surprise to see higher gold prices due to more short covering.

Resistance: $ 1308, $ 1318, $ 1347
Support: $ 1273, $ 1264, $ 1244

Traders Notes: Buy the breakout at $ 1353 to target $ 1375 area or higher. Only short gold if it breaks below $ 1240 as downward resumption can continue to target $ 1210 and $ 1180 area again.

The weak US dollar index and previous retest of low at $ 19.20 (now become support) has given silver enough bullish momentum to trade higher. It has broken out of the downtrend channel line but still within a tight Bollinger band. A bullish breakout and follow through buying is needed so as to propel silver prices higher. Investors could pile more on silver on the back of a possible recovery and better than expected Chinese economic data (assuming that the data remain positive). Expect a retest of $ 20.60 and possibly as high as $ 21.05 before a period of consolidation. Silver could embark on a mini uptrend line and the RSI seems to support the higher prices. The stochastic fast line has also risen higher while the slow line has got more rooms to the upside.

Resistance: $ 20.60, $ 21.00, $ 21.59
Support: $ 19.80, $19.20, $ 19.00

Traders Notes: Buy on the breakout of $ 20.60 but with a stop loss at $ 20.10 target $ 21.05 and $ 22.00 area. A higher high is needed now after it made a higher low.