Gold & Silver Weekly Outlook: Gold Stabilizing Above 1200

Feb 06, 4:49 pm
Gold and Silver outlook

The final day of last week came in with many economic releases, especially from the US, which had a notable impact on Gold and Silver. The US Jobs Report came in with mixed signal, but mostly disappointing, leading the US Dollar Index to close the week below the 100 barrier, continuing seven weeks of consecutive declines.

The weekly close below the 100 barrier increases the risk for further declines ahead, which in return, might keep the bid on both Gold & Silver for the time being. In today’s article, we will take a look on both metals, and what to expect during the days ahead.

Gold Stabilizing Above 1200 (Bullish Sign)

Gold has been rising since the beginning of the year; Gold advanced with more than 1% six out of the past seven weeks, which seems to be a strong signal over the coming weeks.

Looking at the weekly chart, Gold closed last week strongly higher above $1200 barrier. Moreover, it also closed above the previous weekly high, showing some sort of a bullish engulfing candle, which is considered as another positive signal on the weekly chart.

The Technical Indicators are also positive on most time frames. RSI has just crossed above 50 midpoint, while Slow Stochastics is now trading above 80’s which keeps the door open for further gains ahead, as long as it stays above last week’s lows around $1200.

On the upside view, there is no significant resistance area before $1237, which should be watched carefully, as a break above that resistance, would clear the way for another rally above $1240.

As for the daily chart, it’s also positive. However, we need to see a clear daily close above Friday’s high, which might be seen later today.

The short-term support area stands around $1220, which is still holding since the beginning of the day. The technical indicators are also positive. RSI is above 65, while stochastics is trading well above 85.

In short, as long as gold stabilizes above $1200 this week, the outlook remains bullish with a possibility to test $1230, $1237 and $1240. Otherwise, traders should be ready for another pull back below $1200.

Silver Outperforming Gold (Bullish Sign)

Traders need to be very careful with silver this week, as it is trading around a key level. 50 WEEK MA stands around 16.55, which should be watched very carefully. This is the first time that silver is trading above that resistance since November of last week.

Moreover, Silver has been rising for the past seven consecutive weeks. Something we have not seen since 2011. This week’s close should be significant if it goes as planned.

Looking at the weekly chart, Silver is already trading above its 50 WEEK, but still far away from last week’s high at $16.75. A break above that high is needed to clear the way for further gains ahead.

The technical indicators are still encouraging, RSI is above the 50-Midpoint, while Stochastic is trading above 90, which keeps the bullish outlook in place, with a possible short term retracement, where buyers likely appear once again. The immediate resistance level stands at $17.97 and $18.0.

As for the daily chart, the technical indicators are positive but nearing overbought status. RSI is above 65, but the stochastics oscillator has been at 80’s since more than a month now, which eases the possibility for an immediate rally ahead, instead, increasing the possibility for a short-term retracement to the downside, where buyers are likely to appear.

For the time being, the bullish outlook remains unchanged as long as it stays above the former resistance level at $17 and above its 50 DAY MA which stands around $16.65.

We will take a look at both metals at the end of the week, hoping for a positive price action according to our plan.

 
Nour Eldeen Al-Hammoury

Nour Eldeen Al-Hammoury has more than ten years of experience in focusing on foreign exchange and global economic developments, as well as central bank policies and intermarket analysis (global markets relationships). Nour Eldeen is a regular on many major TV networks (several times each) such as: BBC Radio, BBC World News, Al-Jazeera, Al-Hurra TV CNBC Europe, CNBC Asia, CNBC Arabia, Al Arabiya, Bloomberg, Russia Today, Dubai TV, Sama Dubai, Skynews Arabia, Qatar TV and Future TV News.