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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.

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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.

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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.

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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 outlook

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).

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Silver’s double-top formation is clearly visible on the four-hour chart.

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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.

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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

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.

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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.

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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