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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.

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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.

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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.

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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.

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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.

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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.

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Further gains then target the 2018 high of $17.30-17.70.

Jason Sen

Technical Analyst & Trader

For more information and trading education visit Intertrader

The content of this article is the personal opinion of the author and not Intertrader. You should under no circumstances consider the information and comments provided as an offer or solicitation to invest. This is not investment advice. The information provided is believed to be accurate at the date the information is produced.

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