Gold and Silver Start the Week within Consolidation Ranges

Gold and Silver Start the Week within Consolidation Ranges

Gold: Consolidation above the Triangle Support

Gold (XAU/USD) has been bearish this past couple of weeks, falling from a common high around 1320 down to 1271.55 last week. In the 4H chart you can see the sharp dip falling below the previous August low as well as the July low. Then, we saw a consolidation between 1271.55 and 1283.30. Price is starting the week in the middle of this short-term range.

Gold (XAU/USD) 4H Chart 8/25
gold 4h chart 8/25

(click to enlarge)

If the market starts the week breaking back above 1285, it could be in a bullish correctino against the last 2 weeks of bearish price action. In this bullish correction scenario, you can see resistance starting aroudn 1295 up to 1305. This area contains some support/resistance pivots, the cluster of 200-, 100- ,and 50-period SMAs in the 4H chart, and the support area of a prirce top that formed under 1320.

If price falls below 1271, we are looking at an attempt to test a triangle support seen in the daily chart. Price is also testing an area of common lows in April and May that stretches down to 1268.55. Being able to clear below 1265 should signal a bearish outlook at least toward the 1240 support pivot, and possible exposes the 2014-low aroudn 1283.

Gold Daily Chart 8/25
gold daily chart 8/24

(click to enlarge)

Silver Continues to Bear Down

With silver (XAG/USD), we are looking for a more mature bearish trend that already has the 2014-low of 18.64 in sight, or at least the 19.00 handle. Last week, price dipped to 19.32, extending decline from the July high at 21.56. Price consolidated most of the week between the 19.32 low and the 19.60 consolidation high. A break above 19.60 can open up the 20.00 area, while a dip below 19.30 continues the current bearish market in the medium-term, with the 19.00 and 18.64 levels in sight.

Silver (XAG/USD) Daily Chart (8/25)
silver daily chart 8/25

(click to enlarge)

The bearish outlook is dominant, and the daily RSI is not even below 30, suggesting there is still further room to fall before traders will see oversold condition in the daily chart. This is also the case with gold, as you can see in its daily chart above.

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