Gold & Silver Update – 19th March 2015
Gold upbeat but still biased to declines.
Gold futures remain resilient as the declines looks to have stalled temporarily. Price action managed to close above 1165 levels yesterday after a dovish FOMC, which briefly saw Gold trade near 1170 levels. The 4-hour chart below shows a medium term support/resistance level at 1165, which if tested and successful could see Gold prices rally towards 1183, a major support level that was previously broken but remains untested for resistance.
A test to 1183 would potentially complete the retest to establish resistance with the next target to the downside being a break below 1165 to head to the previous low at 1147/1150 levels.
As long as prices remain within the falling price channel, the downside bias remains intact. What could potentially threaten this view would be a break out from the falling price channel and then establishing support at 1165, which would shift the short term bias for a possibly higher correction, potentially breaking out from 1185 levels to test the 1200 psychological mark.
A test to 1185 through 1200 is further validated from the daily charts where we notice that price has been reacting to both the previous low at 1141, the tip of the inverted head and shoulders pattern and the falling price channel, where price looks to be breaking out.
In this aspect, we could possibly expect to see a dip to 1165 as noted from the H4 charts before the short term correction begins, which could initially see Gold trade near the range of 1197 through 1203 levels. This retest also fits in well with the breakdown of prices from the minor rising price channel.
With yesterday’s price action turning bullish, we expect that the momentum will be maintained in order to lift the prices towards the short term levels of 1200 which should offer a good possibility to attract new sellers into the market.
Silver could test $16
Silver futures, 4-hour charts shows a short term bottom being formed near 15.42 levels as price action rallied, briefly testing the upper end of the falling price channel. Within the very short term, Silver could decline to test the short term broken resistance at 15.75 levels to test for support before it rallies towards the previous broken support at 16.25 levels to establish resistance.
Looking to the daily charts, we can see that the price level at 15.32 has turned out to be a strong support level with price testing these lows three times and being rejected. The latest test of the support at 15.32 could yet again see a rally, this time testing the previous broken low at 16.24 levels. If the 16.24 level holds, Silver prices could possibly break the support at 15.32 the next time around and reach its intended price objective towards 14.95 levels.
