As we said yesterday, the short-term set up on gold is bullish and inherently we recommend a cautious buy if a breakout of $1290 is given. Prices could continue higher should it break pass previous resistance at $1298 and the psychological level of $1300. Potentially, prices could retest $1321 and short covering rally may push the current rebound higher. Despite that, the medium term bearish perception has not changed. Once the rebound rally is exhausted, we would strongly recommend our readers to short sell the yellow metal again. Commerzbank Bullion weekly argued that strong resistance will prevail at $1300 and $1321 area.
Only a break above $1300 will give the bulls more rooms to push higher and force some short covering. The corrective phase in prices may continue higher and should $1338 taken out then higher high is possible. It could also mean that gold did bottom out at $1180 (in the short term) and for now that will be key support. Meanwhile, there are many resistances at higher prices and the dollar index will play a big role to determine where prices may go in the next few weeks.
In the meantime, we anticipate higher prices in the short run and will sell the rebound rallies to target previous low of $1180 again. Below is the eight-hour chart that show divergence as the RSI has reached previous ceiling and the stochastic heading lower when prices moved higher. This is a classic case that a possible market top is in place but we will continue to monitor the movement.
Gold
Silver
Robert Jillies is technical analyst at sharpspixley
Only a break above $1300 will give the bulls more rooms to push higher and force some short covering. The corrective phase in prices may continue higher and should $1338 taken out then higher high is possible. It could also mean that gold did bottom out at $1180 (in the short term) and for now that will be key support. Meanwhile, there are many resistances at higher prices and the dollar index will play a big role to determine where prices may go in the next few weeks.
In the meantime, we anticipate higher prices in the short run and will sell the rebound rallies to target previous low of $1180 again. Below is the eight-hour chart that show divergence as the RSI has reached previous ceiling and the stochastic heading lower when prices moved higher. This is a classic case that a possible market top is in place but we will continue to monitor the movement.
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Gold
- Resistance: $1300.86, $1310, $1350
- Support: $1277, $1267, $1208
Silver
- Resistance: $20.30, $20.44, $21.59
- Support: $18.20, $18.00
Robert Jillies is technical analyst at sharpspixley
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