Key Levels and Outlook for Gold and Silver (4/21)

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Key Levels and Outlook for Gold and Silver (4/21)

Gold and Silver have been bullish since the middle of March as the USD faded across the board. Let’s follow up on the technical developments of these precious metals.

Gold (XAU/USD) 4H Chart 4/21
gold 4h chart 4/21
(click to enlarge)

In mid-March Gold rebounded from a low of 1142.67 to a high of 1224.21 in April. Since then, it has been trading relatively sideways. Some would see a slightly bullish channel, but price action since last week has flattened around 1200 instead of following the rising channel structure – it has been holding under 1210.

Now, if price continues to hold under 1210, the bearish bias would remain. Then, if price breaks below the support/resistance pivot around 1180, gold would likely have revived its bearish outlook with pressure on the 1142.67 March low and with the 1130, 2014-low in sight as well.

Gold (XAU/USD) Daily Chart 4/21
gold daily chart 4/21
(click to enlarge)

The daily chart shows that the market has flattened since last November, when price marked the 1130 low. However, after the rally to 1300, the dip in January through February and into March has revived the bearish outlook as price got back below the cluster of 200-, 100-, and 50-day SMAs.
2) The RSI has held below 60, which reflects maintenance of the bearish momentum.

If gold pushes above 1210, it would likely still be in consolidation, with upside risk to the 1230-1240 resistance area. If gold starts holding above 1200 and pushes above 1240, then we should shift from the bearish outlook towards a bullish one in the short-term, within the context of an overall sideways market in the medium-term.

Silver (XAG/USD) Daily Chart 
silver daily chart 4/21
(click to enlarge)

Silver rallied from the 2014 low at 14.55 to 18.47 in January. Since then, price seems to have revived the bearish outlook with price under the SMAs and with the RSI tagging 30 and holding under 60 for the most part.

With price holding below the 17.30-17.50 resistance area, silver maintains a bearish bias as well. It looks poised to fall towards the 15.50 support area below which would be the 2014-low of 14.65.

Silver (XAG/USD) 4H Chart
silver 4h chart 4/21
(click to enlarge)

With the bearish outlook in the daily chart, we should expect the market to fade short-term rallies that we can observe in the 4H chart.

In the 4H chart, we can see that there was a double top, or range breakout a couple of weeks ago. Since then, price has held under the topping price structure and below the cluster of 200-, 100-, and 50-period SMAs as well. The RSI also held under 60 after tagging 30.

So watch out for sellers in the 16.20-16.40 area if silver goes in the 4/21 US session with a rebound.

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Fan Yang has been a professional forex trader and analyst since 2007. He specializes in technical analysis and has a Chartered Market Technician designation since 2011. He was the chief technical strategist at CMSFX He was also the founder and chief currency strategist at FXTimes Over the years, Fan has not only been a trader and analyst but also an educator. As a proponent of both technical and fundamental analysis in trading, Fan advocates simplicity and discipline as key factors in making trading decisions when faced with so many "clues" and "signals". Currently Fan Yang is the chief currency analyst and webinar instructor at forexminute.com.