Gold And Silver: Up Or Down?

After a close at the $1390.00 area, gold started well in early Asian trading hours holding the same area, but the lack of demand to push prices higher was a disappointment. This indicates that the market is not ready to break above previous resistance at $ 1394.50. As per our last commentary, short sellers have a strong interest to keep prices below the psychological level of $ 1400.00 and have successfully done that. The bears remain in control, and gold continues to range trade aimlessly before the release of the FOMC statement.

Many traders are either on the side line or staying nimble. A break past $ 1373 will trigger lower prices around $ 1355 to the $ 1345 area. The bears are clearly winning, and have the intention to revisit the $ 1321 level. However, the previous low at $ 1338 will be a strong support. If that is given, then we can see a potential stop loss trigger scenario that could sent gold lower.

Resistance: $ 1395, $1400, $ 1423
Support: $ 1373, $ 1365, $ 1355

Traders Notes: Short gold as it breaks trend line at $ 1390 / $ 1395 with an open target – stop loss stands at $ 1403 / $ 1425

Silver has continued to trade a lower higher and lower low, if we used the previous high after the major sell off. A previous high of $ 24.71 was the peak, and we will draw a straight downtrend line which continues to play as a strong resistance line (see chart below). Technically, the oscillators suggest that the market is at an oversold territory, but the lack of demand hampers any rally. There were no strong buyers at this price level. Most are short term speculators dip buying on the market, who sold when it spiked higher. Investors favor lower silver prices, and we may continue to see it weaken before any rebound rally.

Resistance: $ 22.51, $ 23.35, $ 25.59
Support: $ 21.10, $ 19.66, $ 19.00

Traders Notes: Stay on the sideline.