Gold & Silver; FOMC- Dovish
CommodityOnline | Jul 11, 2013 07:06AM ET
We maintained our view from our previous commentary that “The rebound in gold prices must be treated cautiously – rising prices could just be a smoke screen to what could be coming next”. We need to see more evidence of selling exhaustion before taking any long positions. With the rally in US dollar pretty much intact, it is far too risky to buy the yellow metal. Shorting the metal is far more favourable as it could retest $ 1180 and should it break lower, we see $ 1155 as the next target.
Resistance: $ 1260, $1269, $ 1300
Support: $ 1207, $ 1200, $ 1180
Traders Notes: Dip buyers are cautiously buying with a stop loss at $ 1150 – buying area is $ 1180 / $ 1200 / $ 1225 to go long. Expect a short period of short covering before the market resume lower.
We expect silver prices to move higher as the market digest the dovish remark from Mr Bernanke speech. However, the downtrend still persists and we fear that the rebound will be short lived. Any rallies must be sold but we are also aware that the market is near a bottom before it looks to consolidate in this downtrend. With gold prospect being negative, Silver prices fare no better in the short and medium term.
Resistance: $ 20.11, $ 20.44, $ 21.59
Support: $ 18.20, $ 18.00
Traders Notes: Stay on the side line.
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