Since the beginning of the week, Gold and Silver has been trending higher gradually and getting closer by the hours to post the highest level of this year.
There are still many factors involved for both metals. However, one of the main factors is the uncertainty around the world. Whether in the US, Brexit and the French election.
Yet, such move is likely to accelerate over the coming weeks and months, as the outlook for both metals remains bullish since the beginning of the year.
Gold Nearing Its 200 DAY MA
Gold has been trending higher since the beginning of the week, despite the fact that there is a price gap since Monday and it’s not filled yet.
The closing price of Friday was at 1243 while the opening price of this week was at 1253. So there is around $10 gap, which should be filled sooner or later.
Gold edged higher toward its 200 DAY MA solid resistance and failed to break above that resistance for the second time this year, which might be seen as a possible double top on the daily chart as shown above.
Moreover, the technical indicators are heavily overbought and starting to crossover to the downside, which increases the possibility for another short term retracement to the downside, before the uptrend resumes.
The downside retracement is likely to remain limited above certain levels, beginning with the first immediate support which stands at $1243 followed by 1227, which represents its 50 DAY MA on the daily chart.
On the upside view, Gold still needs to break above that 200 DAY MA resistance area to clear the way for another rally above this year’s high.
Looking at the last known ETF physical holding of gold, we can see that it has increased gradually for the past four weeks, and remains at the highest level of this year, which also support our bullish outlook for the next few weeks.
Only a break below 1170 USD to the downside would change the current bullish outlook to neutral.
Silver Above Its 200 DAY MA
Silver has a little bit different story that Gold. Silver is outperforming gold since the beginning of this year, posting more than 10% of gains.
Moreover, Silver has already regained above its 200 DAY MA since the beginning of the week, and so far it’s holding well above that support for the past two days.
Despite the fact that the technical indicators are heavily overbought and crossed over to the downside, silver is still holding well. Which keeps the bullish outlook unchanged. Yet, this doesn’t eliminate the idea of a short-term retracement ahead, before the uptrend resumes in the next few days/weeks.
The downside retracement is also likely to be limited above its 50 DAY MA which stands at 17.62. This is only if Silver managed to break through the first immediate support which stands at $18
On the upside view, the first resistance area stands around 18.30, which should be watched very closely, as a break above that resistance is still needed to clear the way for another rally to test this year’s high around $18.50
Silver ETF holding eased back for the first time in over three weeks, but remained near the highest level of this year, which keeps our bullish outlook unchanged for now.