Metals lost some ground at the end of last week as the US Jobs Report came in much better than expected, sending the US Dollar higher across the board and posting the biggest one-day gain since the beginning of the year.
Gold lost nearly 1% since Friday, while Silver declined by more than 2.5%. However, since the beginning of the week, both metals were rising slightly, but recovering most of the last week’s declines.
Demand Remains Solid
Looking at the recent data by the CFTC, traders are still convinced that metals has more room to rise. However, traders need to be very cautious as the latest data is reported until the end of last Tuesday.
Yet, the figures are still encouraging. The recent data showed a notable increase. The Non-Commercial longs increased by the most in 6 weeks, while Non-Commercial shorts eased back to the lowest level in five weeks, declining for the third week in a row.
As for Silver, Non-Commercial Longs increased for the first time after declining for six weeks in a row. On the other hand, the Non-Commercial Shorts decreased back to 60K, which is the lowest level in 4 weeks.
Gold Rising Trend Line Support
Despite the recent decline last week, Gold managed to stabilize above 1255 USD/Oz since the beginning of the week.
At the same time, Gold managed to bounce right from its trend line support as shown on the chart, adding more than $10.
However, the technical indicators are still pointing to the downside, especially the stochastic indicators. Yet, the RSI is still pointing higher trading around 58 so far.
In the meantime, as long as the trend line holds, the possibility for a deeper retracement to the downside is minimal. Otherwise, a breakthrough that support would increase the possibility for another leg lower, probably toward 1250 and even 1240.
On the upside view, a break above last week’s high is needed, in order to clear the way for further gains, probably to retest this year’s high.
Silver Remains Solid Above $16
Silver failed to stabilize above its down trend line support last week, which looked like a fake breakout, leading to another leg lower on Friday, supported by higher USD.
However, Silver stabilized above $16 since the beginning of this week, which should be watched very carefully, as this level has been supporting Silver since November of 2016 until today.
Meanwhile, a break above that trend line resistance is still needed to clear the way for further gains ahead. This week, the trend line resistance stands at $16.60. This is the level that traders need to keep an eye on over the coming days.
Technical indicators area nearing the oversold area. However, the RSI ticked higher once again trading around 48 until this report is released.
As long as Silver continues to trade above $16, the downside retracement possibility will remain minimal. Otherwise, a breakthrough that support would clear the way for a deeper retracement, probably toward $15.60’s.