XAU in a fight with significant resistance
Gold / Silver Price Technical Outlook
- Gold maintains itself around a key intersection of resistance
- Silver continues to channel its way higher, but to reach substantial resistance
Gold and Silver Price Analysis: XAU in a Fight against Resistance
Gold marked the top of a broad August channel earlier in the week, a line that sits in almost exact confluence with the 200-day moving average. The initial recoil was not unexpected given the importance of resistance.
What we will want to see now is if gold can eliminate resistance soon. A strong breakout above could have significant long-term ramifications and could mark the end of a long period of correction in the context of a major bull market.
If so, then the trading bias would shift to the long side for the foreseeable future as the old high of 2075 and above becomes targeted. Of course, this wouldn’t happen in one big quick move, but could present good trading.
In the event that gold continues to stay within the limits of the channel, then the rise will obviously be kept under control. The trendline from the late March low is initially higher as support with the top of a small range sitting just below 1800.
Gold Daily Chart (large spot on the chart here)
Silver is not at a crossroads of a similar magnitude to gold, but if precious metals continue to trade higher, XAG / USD will have significant levels to contend with between ~ 28.30 and 30. For now, the focus is on the ascending channel out of the late March low.
Stay above the lower parallel and the trading bias remains focused on the long side. It will take a breakdown below lower parallel and horizontal support around 26.64 to shift attention down to the 200 day trendline from the March 2020 low.
Daily silver chart (higher pipeline)
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— Written by Paul Robinson, Market Analyst
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