FX: Gold prices struggle beneath resistance at 1624-1640
Gold prices struggle beneath resistance at 1624-1640.
Gold prices are struggling beneath resistance at 1620-24 and 1640. The yellow metal MUST close above these levels in order to confirm sustainable extensions higher in line with the major uptrend towards 1700.00.
Until then, we prefer to hedge for downside risks following the recent unprecedented explosive upside move, which triggered a confluence of our momentum exhaustion signals.
As previously stated, it is critical the market confirmed a reversal beneath a filtered price/time trigger point. This downside trigger level still holds at 1588/82.
In terms of the big picture, we continue to watch price activity within the apex of the 12-year exhaustion pattern (illustrated on the weekly log chart), which has also developed a unique long-term DeMark™ exhaustion signal.
Gold’s COT liquidity indicator (net long positions) remains squeezed within a tight range (as Gold continued to make push to record highs on lower volume). At this stage, the risk remains for a downside breakout which would unlock over 1.5 years of sizeable gold long positions.
SILVER
Failure into key resistance may signal bearish pattern.
Silver’s latest failure into key level at 41.0513 may signal a bearish pattern. Our short position remains intact, favouring a potential sharp decline over the next few days.
Near-term support can be found at 39.1425. A break here would trigger downside risk into 33.8416 (32.8% Fib), near the long-term 200-day MA at 33.5707.
Remember that key macro support exists at 26.9600 (50% Fib-1999 bull market) and would still mean that silver’s long-term uptrend remains intact.
Meanwhile, bulls would now need to close above the recent reversal high at 41.4500 to offer a sustainable recovery higher into our next target zone between 43.1136-43.8477.
We also continue to watch silver’s relative performance against gold, which is currently unwinding (already up 37%), from extreme oversold conditions.
STRATEGY: SHORT 3: 39.2800, Obj: 36.7750/32.3125/28.9000, Stop: 41.5500.
