Gold & Silver; Still Data Dependant
CommodityOnline | Aug 02, 2013 04:48AM ET
As per our last commentary, we warned the short term possibility as per below paragraph in italics. We continue to see gold range trading but a dovish remark from the FOMC statement could give the edge for the bulls to retake control and test previous resistance level. We will be cautious as we are heading to the end of this week with a new month ahead and a highly better than expected NFP data to be digested (or has it been priced in?).
Technically, a break below $ 1318 will take gold to retest minor support at $ 1315 and $ 1308 but a failure to hold on support at $ 1290 could seriously impair the rebound rally and downtrend resumption can continue. Only a break above $ 1340 and $ 1347 will encourage more short covering and generate more buying interest. However, we remain bearish as long as gold is trading below $ 1525 area and see a period of consolidation before resuming on its uptrend.
Resistance: $ 1348, $ 1355, $ 1387
Support: $ 1315, $ 1308, $ 1270
Traders Notes: Buy the breakout at $ 1353 to target $ 1375 area or higher. Only short gold if it breaks below $ 1270 as downward resumption can continue to target $ 1210 area again.
Despite the US dollar weakness and strength in the gold market, silver could not move higher and remains trapped below $ 20.00 area. Technically, the daily MACD has risen but continue to trade in negative territory and prices have failed to break above the upper downtrend line for three times. RSI and stochastic has also shown downside momentum – suggesting more consolidation and downside risk to come. Support comes in at $ 19.25 and $ 18.71.
We continue to see a persistent downtrend and fear that the rebound will be short lived. Any rallies must be sold at the moment unless it trade above $ 21.60 level to give the bull a chance to recover.
Resistance: $ 20.60, $ 21.00, $ 21.59
Support: $ 19.20, $ 19.00
Traders Notes: Stay on the side line. Only a break above $ 21.60 will give the bulls more ammo to retrace higher.
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