Gold has hit the end of its bull run
Here’s my outlook for gold, silver and WTI crude.
Gold has experienced nearly a $200 rally from the low of $1160 in August 2018. This week it powered higher again after beating the January high of $1326 and, more importantly, the 500-week moving average at $1328 to gain another $20 by midweek, reaching a high of $1346.
However, gold unexpectedly wiped out all the strong gains for the week yesterday, leaving a three-candle reversal pattern called an evening star, which occurs at the top of a bull trend and which you can see in the chart below.
Looking at the weekly chart, we can see how the price topped about $10 below the 100-month moving average and also the five-year trendline resistance at $1355. All the signals therefore point to the end of the bull run for gold.
The medium-term outlook for gold has turned negative. We have key short-term support at $1320/18 today. Long positions should put stops below $1316. There is minor support at $1312/11. A break below $1309 targets $1303/02. Try long positions with stops below $1299.
Holding key support at $1320/18 targets a move to $1324/25 and resistance at $1330/31.
Take profit on long positions as the longer-term outlook turns negative. We could start to place short trades at $1336/37 and add on moves towards $1345.
Silver has been climbing since November in a less impressive recovery from $13.85 to form a bearish double top formation at $14.18/14.21. We can see from the daily chart below that it is holding the 500-day moving average resistance (green line).
Silver’s double-top formation is clearly visible on the four-hour chart.
Silver is likely to have topped here because the metal was held by the 500-, 100- and 200- week moving averages at $16.18/33.
Therefore, the outlook has turned negative on silver as we dip to the first support level at $15.80/70. Further losses are expected on a break lower to $15.30/20. A break below $15.00 acts as the next important sell signal.
WTI crude oil has topped at strong resistance at $57.60/80 and this is key to its direction. Holding here targets minor support at $56.70/60 (we bottomed exactly here) then $56.20/10, which could see a low for the day. However, be ready to sell any break below $55.80 to target $55.60/50 and $55.35/25.
Bears could try short positions at strong resistance at $57.60/80 with stops above $58.10. A break higher is a buy signal targeting $58.70/80 & $59.50/60.
Technical Analyst & Trader
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