After the FOMC announced the end of QE, gold and silver slid further into lows not seen since 2010.
Looking at the weekly chart, we can see a bearish market. Price is under the 200-, 100-, and 50-week simple moving averages (SMAs), and the RSI has held under 60 for the most part after tagging 20, which shows maintenance of bearish momentum.
Price did stall for more than a year after holding above 1180 in mid-2013. It consolidated in some what of a descending triangle. Finally this week, after the FOMC helped the USD regain its stride, (XAU/USD) fell below this consolidation, signaling bearish continuation.
When we look at the weekly chart, we can see a support pivot at 1084.90. I would say this level up to the 1100 level should be seen as a support area, especially if the weekly RSI returns below 30, which shows oversold condition. From here, we might expect some short to medium-term consolidation with upside risk back towards the 1200 handle.
At this point, a break above 1300 would be needed to introduce any discussion of a bullish market in gold.
Silver has a similar technical set up in the weekly chart as gold. Price is below the 200-, 100-, and 50-week SMAs and the weekly RSI has held under 60, while being able to break below 30.
(click to enlarge)
The thing is, silver has already been making new lows on the year after breaking a descending triangle pattern that started mid-2013. The weekly RSI is also already in the oversold area.
As price digs lower, buyers might be found at 14.63, a support pivot and low of 2010. With the RSI also showing oversold condition, we can see an attempt from this 14.63 area back up towards the 18-18.20 area. Otherwise, below 14.50, the next support might be around 12.50.
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