The first trading week of January has kicked off particularly well for the precious metals duo that we covered.
Gold and Silver prices made strong gains, a testament that there are bullish conviction as well as an improved technical configuration, which will go along way to sustain the 2019 year-long potential bull market. Still, we are aware that there will be ups and downs, peaks and troughs along the way but we reckon 2019 average gold and silver prices are likely to outdo 2018's!
For our previous previous Gold and Silver analysis, kindly click on the link below this article.
A great deal of emphasis has been put on haven-demand, as global stock saw follow-through selling in the early few days of 2019. The Japanese Yen was the best indication of haven-demand as it flashed crash to a low of 104.85 before resuming higher. Low liquidity or panic fat-fingers are to be blame but the damage was done and may very well be the short-term cue that the trade to the downside has run its course.
But let's focus closer to silver, with the solid breakout that has sustained the current momentum higher. Its technical development is improving too, with the bullish retest near $15.00 - not allowing fresh buyers to re-enter just yet. However, the short-term bullish run may have got too far ahead of itself and we expect some healthy pullback to emerge in the next two weeks. That said, we think the pullback should allow bullish traders to re-exert their dominance going into February and March.
Technical conclusion on Silver daily chart
Cautiously bullish:
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A medium term low has been established at $13.90 per oz area
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Breakout from $14.91 and $15.00 are bullish
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Approaching band of overhead resistance which could trigger some profit taking in the short-term
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A retest of key technical price level will determine how strong the bulls are for the next 2 months or so
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20 DMA playing catch up while the 50 and 100 is still lagging behind
Technical conclusion on Gold daily chart
Short-term bearish though we are bullish in the next three months:
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Bearish engulfing daily candle on Friday Jan 4 is key reversal pattern
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Expect overhead resistance between $1285-$1305 per oz in the short-term
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Look for pullback to a deep $1212 per oz area - failure below could change the technical landscape
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Dips should still be bought but given the strong run-up it has already, we are mindful of a pullback
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