Gold Slides Below Failed Wedge; Silver Completes Double Top
Gold Daily chart 8:22PM EDT 10/14/2012
Failed Wedge: Gold has been stalling its
rally since testing the 2012 highs around
1790. After breaking to
1795.80, it appears gold may have topped off, or is at least in an apparent
consolidation. The daily chart shows the precious metal priced in USD forming a rising wedge. However, it failed to bounce off the projected
support for another upswing, and instead fell sharply to start this week (10/15). The RSI was in a
bearish divergence in
overbought territory, but has already resolved that.
Momentum: Now, the RSI is near 40, so if the gold market is in
consolidation, we might see some slowdown, or
support in the near-term, for the rest of this global session (10/15).
If on a subsequent pullback, the RSI can be held under 60, preferably under 50, this nascent bearish momentum from the
1795.80 high is still intact. If price can hold under the projected falling
trendline seen in the 4H chart, the market should continue to focus on some of the lower
support pivots. These
support pivots are
1736 and
1715.22.
Gap: This MT4 chart is showing a gap. Many retail trading platforms will show this gap, meaning prices changed over the weekend, while these platforms did not upgrade price. It was more than a $10 gap – one that deserves attention.
Gold 4H chart 8:25PM EDT 10/14/2012
Silver Daily chart 8:32PM EDT 10/14/2012
Silver was spotted developing a
double top last week, and starts this week completing it by falling under the pattern
support of
33.28. The daily chart shows a
double top breakout projection roughly to
31.22. A slightly more aggressive projection would be to the next possible
support factors of 50% retracement at
30.74, and the 200-day simple
moving average slightly lower.
The daily RSI is also at 40, which means if the market is in
consolidation, there should be some
support here in the near-term. (rest of the session or a little more).
A pullback should really not go back above the projected falling
trendline. Holding price under it is a sign of silver bears taking over. A break above the central pivot area around
34.20-34.35 could be taken as a sign of a false
breakout to the downside, which suggests a
rally to test the previous high of
35.38.
Silver also shows a downside gap of about $0.50. Although gold fell more in price, silver fell more percentage wise in the gap.
Silver 4H chart 8:38PM EDT 10/14/2012
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Gold Slides Below Failed Wedge; Silver Completes Double Top
