Jump to content

Gold tips $1900 and silver jumps 8% as investors seek safe havens



The escalating tension in Eastern Europe has caught the whole world’s attention and reinforced the precious metals’ investment appeal amid the rising appetite for safe haven shelter.

BG_silver_gold_9844445.jpgSource: Bloomberg
Hebe Chen | Market Analyst, Australia | Publication date: Friday 18 February 2022 

Gold heading towards 12-month-high

Gold prices are sharply higher this week. A fresh eight-month high just above $1,900.00 was recorded on Thursday. The cost of the yellow metal has been up 7% for the past three weeks. The upward pathway is likely to continue as the current trendline is poised to be replaced with another steeper one.

From a bigger picture we can see that the trendline connected by the lows from March 2021 has shown strong momentum underpinning the price growth of the precious metal, which is now just a step away from the 12-month-high at $1916.

The next challenge to face after $1916 can be found three months prior at $1954, which was reached on November 9th, 2020. The nearest support in view is $1870, the top point in November 2021, before the price pulls back to this January's high at $1847.

Gold%20daily1802.JPGSource: ProRealTime
Gold%20weeky.JPGSource: ProRealTime

Silver: RSI shows momentum to move higher

Safe haven demand is the prominent reason behind rising commodity prices as more and more people believe a Russian invasion of Ukraine is "imminent." As such, the silver price mirrors the strong pace of the gold price, having advanced 8% higher in February up to this week.

On the daily chart, the silver price is clearly trading in a 'rising tunnel' that is expected to send the price towards $24 in the near-term and challenge the January high at $2442. Although it looks like the price has encountered some pressure at the level of $23.77, the buyers' momentum shown from the RSI is pointed to push the price higher.

For those bull buyers looking to participate at the dip, a mild retreat to the lower boundary of the moving channel around $23.50 could be considered as a buying opportunity. At the same time, the level below $23.00 should be an early sign for the momentum to overturn.

Silver%20daily.JPGSource: ProRealTime


Recommended Comments

There are no comments to display.

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
  • Blog Statistics

    • Total Blogs
    • Total Entries
  • Latest Forum Topics

  • Our picks

    • Post in US Market news
      US Consumer price index YoY and MoM coming out at 12:30 UK time as well as US CPI index Food and Energy MoM and YoY. The US fed reserve have been taking measures to tame inflation but these results may impact markets so keep an eye out.
        • Thanks
      Crude oil prices are stagnant, disregarding inventory data and supply woes
      The anticipation of US CPI has seen markets somewhat calm today
      If CPI creates a storm, will a US Dollar move impact WTI prices?
        • Like
      • 0 replies
    • Swiss Franc Firming Against US Dollar and Euro. Will Momentum Take CHF Higher?
      EUR/CHF made a 7.5-year low at the end of last month at 0.9699, moving below the previous low of 0.9804.

      Since breaking lower, the price has not managed to reclaim 0.9804 and it may continue to offer resistance. The 21-day Simple Moving Averages (SMA)is currently at that level, potentially adding resistance.

      Further up, the recent peak of 0.9957 might offer resistance ahead of the break point at 0.9973.

      In the last session, the price has crossed below the 10-day SMA and remains below the 21-, 55-, 100- and 200-day SMAs.

      A bearish triple moving average (TMA) formation requires the price to be below the short term SMA, the latter to be below the medium term SMA and the medium term SMA to be below the long term SMA. All SMAs also need to have a negative gradient.

      Looking at EUR/CHF, the criteria for a bearish TMA has been met and may indicate that bearish momentum could evolve further.

      Support might be at the recent low of 0.9699 or further down at the 161.8% Fibonacci Extension of 0.9638.


      Chart created in TradingView 


      USD/CHF has bounced off low made at the start of this month at 0.9470 to trade in a wide range of 0.9545 – 0.9650. These levels might provide support and resistance respectively.

      While the price is below all short-, medium- and long-term Simple Moving Averages (SMA), they have positive and negative gradients. This may suggest a lack of conviction for directional momentum that might see further range trading.

      Re-iterating this possibility is the price criss-crossing the 10-day SMA. Recent history has shown that when the price crosses the 10-day SMA, momentum in that direction continues. That is not the case over the last week.

      The recent low of 0.9470 may provide support ahead of the break point at 0.9460. On the topside, resistance might be at the break point of 0.9710 or the July peak of 0.9886.

       Chart created in TradingView

      Daniel McCarthy, Strategist Daily FX

      Source: Daily FX
      • 0 replies
  • Create New...