We expect more price volatility on gold as the bears remain in control. In addition, today’s nonfarm payrolls data will determine the next direction that gold will take. We advise our readers to stay on the side line as it is hard to catch a falling knife.
Previous low made at $1522.48 will be the final support before triggering fresh stop loss order. Should that be given, gold will free fall before finding any new support.
Gold continue to look weak technically and the recent sell off create various pockets of resistance. It dipped to a low of $1540.18 before bouncing higher but met resistance at $1554 after a worse than expected US jobless claim numbers.
The selling pressure from the gold back ETF has not abated and the lack of physical buying did not help support the price. As per our last commentary, we suspect that dip buyers are on the prowl while the physical buyers are waiting for lower prices to place their long positions.
- Short gold at $1539 target $1525 with a stop loss at $1546
- Long gold at $1522.50 target $1540 with a stop loss at $1512.50
- Resistance: $1564, $1571, $1579, $1594
- Support: $1535, $1522 (2012 low)
Technically, silver continue to show weakness as it trades at the lower of the Bollinger band. The MACD remains in the negative zone and crossed lower which further indicate selling pressure. Meanwhile, the RSI has drop to a severe oversold area with the stochastic fast line continue to the downside. Silver took out several support levels and eventually found some buying interest at $ 26.64 but the lack of follow up buying will indicate more selling. We continue to be bearish and look to sell on any rallies unless it can break above $ 27.75.
We have made in our previous commentary that we will not get carried away due to a dominant US dollar which continues to cap any rallies and we have on many occasion repeat caution of any silver trade. Unless silver can trade above $ 29.50, we will remain bearish and felt that there is too much volatility (and non-volatility) to take a position.
- Long silver at $29.40 target $29.80 with a stop loss at $29.15
- Short any silver rallies
- Resistance: $27.35, $27.56, $29.50
- Support: $26.64, $25.97