Gold’s rally is gaining traction so far in the year. Silver has also been putting in a price bottom and is awaiting a confirmation to a recent bullish breakout. The mode for both previous metals has been shifting from bearish to neutral and now to bullish. Let’s take a look at the price action so far this year.
Bullish after NFP: The 4H chart shows a market that has found a price bottom mostly above 1170 at the turn of the year. You can see a double bottom broken at the start of the year. Last week we saw some consolidation but after the NFP report, gold continued to rally, confirmation a price bottom and suggesting at least a bullish outlook in the short-term towards the Dec. 2014 high around 1240.
Broken Trendlines: The daily chart shows a couple of falling trendlines coming down from July’s 1345 high. After last week’s price action, gold has broken these trendlines, giving traders more evidence of the bullish scenario. Above 1240, the 1255 around is in sight in the short to medium-term.
Bullish Candlestick Combination: Last week, the combination of strong bullish candlesticks, and a couple of week ones followed by another strong bullish candle suggests a bullish continuation dynamic.
After more or less a triple bottom, silver was consolidating last week ahead of the NFP. After the jobs data, silver did appear to be bullish, but it remains below 16.70. A break above 16.70 will liberate silver into the bullish outlook first with the highs around 17.20 in sight.
The daily chart shows that silver has already broken above a falling trendline from July’s 21.57 high. We can say that if price breaks above 16.70, it not only confirms a triple bottom in the 4H chart, but also the bullish breakout in the daily chart. Above the 17.20-17.30 highs from December, the next resistance will be in the 17.80-18.00 area.
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