Gold/Silver Technical Outlook:
• Gold is trading around the 200-day moving average
• Silver remains stuck in a downtrend
The handle on gold has been difficult lately, with it taking a hard dive from resistance and then almost immediately firming up. The thinking was after the September 7 spill that we would see more follow through to the downside.
With gold firming up and turning higher, the outlook has become less clear. It is currently trading around the 200-day moving average, which hasn’t been a reliable level to work with. If gold can stay above 1780, the outlook is neutral at worst.
Further strength, taking gold past the 200-day at 1807, will have a fairly strong level of resistance in play around the 1830 area. This could make for an interesting test should we see it. It may offer shorts an opportunity to take a trade off it, and if resistance breaks this could clear a path for bullish wagers.
For now, the trading outlook appears quite uncertain and from a risk/reward standpoint neither side of the tape is holding any real appeal.
Silver has been stuck in a steady downtrend since May, and could be poised to continue lower. But it is possible that the past couple of days of firming up could put the trend-line from June to the test. However, as long as that stays intact then the trend is neutral to lower.
From a tactical standpoint, silver is the preferred short of the two major precious metals. It will take some work for it to make its way over to a good risk/reward long trade.
Silver Daily Chart
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—Written by Paul Robinson, Market Analyst
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This content was originally published here.