Gold And Silver Technicals: Week Of 10/20
Christopher Lemieux | Oct 20, 2014 09:32AM ET
We saw the S&P 500 jump higher into the weekend on comments that the European Central Bank (ECB) could buy assets as soon as next week. Although equities were higher by double-digits, Gold and Silver were only modestly lower. This morning futures are heading lower part on profit taking, part on uncertainty.
Last week, gold broke higher through a strong descending channel. This move is promising. Currently, price action has been held underneath key resistance of $1,248/50 per troy ounce, corresponding with the 50-day exponential moving average (EMA). A close above these levels will signal a further leg higher, targeting a supply zone between the 72-day EMA and the descending trend creating in late July at $1,257.4 per troy ounce. However, the 20-day EMA will be the first likely support level on a price breakdown near $1,229, while secondary support is found at $1,22.60.
Silver prices have been lingering in the mid-range of $17 and some cents per troy ounce. Since bottoming, the price action is grinding higher withing an ascending channel with both RSI and +DMI trending upwards. Resistance looks to be strong at $17.78, which corresponding to the 26.8 percent Fibonnaci retracement of July’s high of $21.495. This area will be the nearest target, while a close above this level would push prices to channel resistance at $18. Support will lay at within the channel, but a break lower could send prices to $17 per troy ounce.
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