Silver and Gold have suffered significant losses with the continued rise of the USD and both metals are still in decline. Their only hope could be that the USD index might stall at a key resistance trend line that lies just ahead of it. The direction that the USD takes from this major intersection will most likely determine the next major move for these metals: a bullish USDX breakout would keep pressure on them but a retreat from this trend line would possibly offer the metals some relief.
USD index: the monthly chart shows the USD is trading right up under a major bear trend line that dates back to 2005. This should offer some considerable resistance for the index to negotiate:
Gold: I had been seeing Gold forming up within a possible inverse H&S on the monthly chart. That has now given way to more of a bullish ‘Triple Bottom’ with
a base at the $1,180 level. This level is just above the 61.8% fib of the last major swing bull move (2007-2011). The $1,180 and 61.8% fib are the ‘line in the sand’ levels here for me: a break below these levels would suggest a further fall down to the $1,000 level as this is a whole number / psychological level and just above the 78.6% fib of this last swing move:
Gold monthly: the 61.8% fib has been strong support over recent months:
Gold weekly: I’m looking for any bounce off the $1,180 to support a bullish ‘Triple Bottom’:
Gold daily: a channel within a channel:
Gold 4hr: within a trading channel:
Silver: this metal had seemed to make a bullish triangle breakout some weeks ago but that has subsequently failed with ‘Thanks’, probably, to the relentless USD. Thus, I have re-drawn these triangle trend lines. I wrote some weeks ago, when the $19 level gave way, that it would be hard not to see the $15 level tested at some point and I think this is more likely even now. Hindsight is very clear but the break of the weekly support trend line would have been a good place to go short!
Silver monthly: $15 support isn’t too far below the revised triangle trend line:
Silver weekly:
Silver daily:
Silver 4hr: $15 support isn’t too far below:
Summary:
- The next move on the USD might help determine the next moves for Gold and Silver.
- A bullish USD breakout: watch Gold for any break of $1,180 and Silver for a test of $15.
- A retreat with the USD: watch Gold for any bullish bounce off the $1,180 region to support a ‘Triple Bottom’. Watch Silver for any new bullish shift and a new monthly triangle breakout.
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