GOLD/SILVER TECHNICAL OUTLOOK:
- Gold heading into confluent resistance, intermediate and long-term.
- Silver heading towards neckline of inverse head-and-shoulders pattern.
Gold price has been a ranging mess the past few months and how major confluent resistance gets treated here very soon could determine whether that continues to be the case or not. There is a trend-line running down from the August 2020 high that makes up the top of a large wedge pattern. This is in confluence with horizontal resistance running over from July.
The broader wedge is of macro interest of course, as coiling non-activity eventually leads to a sizable move. But we have been here before, where gold looked poised to start a trend only to fizzle shortly into the move.
A breakout above resistance, a clean daily (preferably weekly) close above 1834 could do the trick in getting gold rolling higher towards 1900 and beyond. While a rejection here may not set gold up to decline for an extended period of time, but more choppy price action will likely lie ahead.
GOLD DAILY CHART
GOLD WEEKLY CHART
Silver posted a low above 23 last week, and on that it is now starting to make good on forming out the right side of an inverse head-and-shoulders pattern. A clean daily close above 24.86 will have the neckline of the pattern broken and confirmed.
Looking at the depth of the pattern, the projected target based on measured moves is up around 28. You get this by adding the depth of the pattern to the neckline. The first big test, though, will arrive at the 200-day moving average at 25.36, and declining.
But before getting ahead of ourselves, the pattern needs to first confirm. We could see a rejection that at the very least puts this idea on the backburner.
SILVER DAILY CHART
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Written by Paul Robinson, Market Analyst, 9th November 2021. DailyFX