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Market update: Gold and silver prices continue to reinforce key support levels after pronounced losses

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Gold and silver prices take a breather from losses; this is allowing support levels to be reinforced and what are key levels to watch in the event of breakouts?


original-size.webpSource: Bloomberg


Daniel Dubrovsky | Currency Analyst, DailyFX, San Francisco | Publication date: Friday 06 October 2023 05:35

In recent days, gold and silver prices have pressed the brakes, bringing their losing streak since late September to a pause.

Given recent price action, how is the near-term technical outlook shaping up for precious metals?

On the daily chart below, we can see that gold has confirmed a breakout under rising support from earlier this year. Meanwhile, a bearish death cross has recently formed between the 50- and 200-day moving averages. As such, the technical outlook remains broadly focused on the downside.

XAU/USD technical analysis

In recent days, prices have confirmed a breakout under the midpoint of the Fibonacci retracement level of 1848.37. That is now placing the focus on the current 2023 low of 1804.78 as immediate support. As such, a bounce is possible. However, the moving averages may hold as resistance, maintaining the broader downside focus.

Otherwise, extending lower exposes the 78.6% Fibonacci retracement level of 1714.83 as a medium-term bearish objective.

XAU/USD daily chart


original-size.webpSource: TradingView

XAG/USD technical analysis

Meanwhile, silver prices are facing a similar landscape. Like gold, XAG/USD has confirmed a breakout above rising support. Losses in the previous week have brought prices to test support, which is the 61.8% Fibonacci retracement level of 20.83.

A hold at support and subsequent bounce would shift the focus on the midpoint of the Fibonacci retracement here as well, around 21.85. The latter may hold as resistance, potentially reinstating the near-term bearish perspective.

Otherwise, continuing lower from here exposes the 78.6% level of 19.39 before the 17.56 – 18.09 support zone from last year comes into focus.

XAG/USD daily chart


original-size.webpSource: TradingView




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