Gold and Silver prices have been rallying in 2015, but has stalled since the end of January and fell after the Hawkish FOMC statement. This week, we are seeing signs that the bull runs are over.
Since finding support at 1168 at the beginning of the year, gold has rallied until 1307. The 4H chart shows the persistent uptrend finally shifting gears a couple of weeks ago ahead of the FOMC meeting. After a hawkish FOMC statement last week, price eventually fell lower, forming a price top and breaking below 2015’s rising trendline. Gold ended the week with a pullback from around 1255 (a support noted in the previous post on gold).
As we get into the 2/3 US session, price is falling and showing respect the price top that was just formed in the past couple of weeks. The price action of breaking below the 50-period SMA and now holding below it is call a bearish slingshot, and it signals bearish outlook in the short-term.
Gold looks poised to move to the next support area, which would be around 1225-1240. Here, we have a previous resistance not only in January but also in December. The 200-period SMA is in this area as well, and it represents a support-resistance area.
We can see many similarities with gold in the 4H silver chart. There was topping after the hawkish FOMC last week. Price bounced up at the end of the week but is now respecting the 17.75 level, which was the bottom of the price bottom and the 50-period SMA. The RSI held below 60, showing maintenance of the new bearish momentum in this time-frame.
Price looks poised to restest the 16.75 level. A break below that opens up the support/resistance area around 16.20, before exposing the 15.53 low on the year.
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