Gold And Silver: A Longer-Term Technical Perspective

Looking at the longer-term monthly charts for the markets you are trading is beneficial whatever your trading timeframe and position - short-term intra-day trader, position trader or a longer-term trader/investor. Trending markets see that prices tend to gravitate towards historical highs or lows on the monthly charts once those trends become stronger.

In other words, the historical highs and lows you see on the monthly charts are important longer-term technical support and resistance levels that can either halt existing price trends, or if penetrated, can accelerate existing price trends.

See on the monthly continuation chart for nearby Comex gold futures that the past few months have tested the mettle of the gold market bulls (pun intended). Prices have lost value and have negated one uptrend line on the monthly chart. There is no doubt shorter-term gold traders have been beaten up in recent weeks.

However, the longer-term technical posture for gold, as depicted by the monthly chart, shows a longer-term price uptrend remaining in place from the 2001 low of $255 an ounce. It will take a move below major psychological support at $1,500.00 an ounce to negate the longer-term price uptrend, which would then also take the gold market out of a longer-term bullish technical posture. The $1,500.00 price level is the critical "line in the sand" for the gold market bulls.

The monthly continuation chart for nearby Comex silver futures shows that a longer-term uptrend line remains in place, but just barely. Price action has been recently challenging trend-line suppor,t and has even dipped slightly below it. Serious longer-term chart damage would be inflicted in the Comex silver futures market if prices drop below major chart support at the $26.00 level.