Gold and silver break higher
Gold has broken higher after a sustained period of sideways trading in the first six months of this year. The rally started in the last two days of May.
After a one-month consolidation phase we see gold breaking above $1440 for the next buy signal. The weekly chart below shows how gold has clearly broken multi-year highs in 2018, 2017 and 2016 up to $1375.
We have reached $1448 but look likely to continue higher to $1451/52, $1458/59, $1462 and resistance at $1466/67. Short positions are very risky in the bull trend. If we continue higher look for $1473/74 and $1482/84.
Looking at the monthly chart above, it is entirely possible that gold could reach as far as $1520 on this next leg higher.
The first support at $1438/36 could hold the downside today but a move below $1432 meets support at $1428/26. On further losses look for a buying opportunity at $1412/1410, with stops below $1400.
Silver bulls were late to the party but are playing catch-up to gold now.
The break above the June high at $15.55 was our first buy signal followed by a break above the two-year descending trendline and 500-day moving average resistance at $15.70/15.80. This triggered a more important buy signal and prices shot higher to strong resistance at 1625/30. As I write we have broken this area too for another very important buy signal, initially targeting 1660/65, then 1670 and 1683/84.
The monthly chart below has 200-month moving average resistance at $16.70/75 so, if we can close the week above this level, we have another buy signal for the start of next week.
Further gains then target the 2018 high of $17.30-17.70.
Technical Analyst & Trader
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