Gold and Silver Approaching Key Support Factors

Gold and Silver Approaching Key Support Factors

Gold and silver have recently developed some bullish breakouts but are both retreating after the breakouts. Let’s stalk these pullbacks as they bring the precious metals to key support levels.

Gold (XAU/USD) 4H Chart 5/25
gold 4h chart 5/25
(click to enlarge)

In May, gold rallied from 1169 to 1232. This rally broke above the moving averages and brought the RSI back above 70. Now, price has retreated but is hovering above 1200 and the 200- and 100-period simple moving averages (SMAs). The RSI is around 40. If the market is to maintain the prevailing bullish outlook, gold should hold above 1200 and the RSI above 40. Then a break above 1215 should put pressure on the 1232 high with risk of breaking higher. However a break below 1190, or even just 1195 should clear the noted support factors and open up the 1169-1170 lows again.

If price does go back towards the 1170 low, the prevailing down trend since 2014, and going back to 2011 might be revived. So if gold starts anchoring below 1200, the downside risk extends beyond 1170, towards the 1143 low on the year and the 1130 low from 2014.

Silver (XAG/USD) 4H Chart 5/25
silver 4h chart 5/25
(click to enlarge)

Silver has recently made a key Silver in a Major Triangle Breakout to the Upside. Since that breakout, price has retreated from 17.77. In the 4H chart we can see a market that is shifting into a bullish trend as the moving averages started to slope up and get into bullish alignment.

The RSI has tagged above 70 and is so far above 40, which reflects maintenance of the bullish momentum. Indeed as silver hovers above 17.00, it remains bullish. Just below are some key support factors from the previous resistance pivot at 16.77 down to another resistance pivot around 16.56. Here we also see a rising trendline from 15.60 might challenge a bearish attempt. A break below 16.50 should put away the bullish outlook and put the 15.60 level in sight, with risk of breaking lower towards the 15.29 low in March, and possibly the 2014-low at 14.65.

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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