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$1,850, the razor's edge?

Commentaries & Views

Gold continues to walk the tightrope around $1,850. Price seems to be crawling along the bottom trendline we have been presenting, with the updated chart below (daily chart). Gold could be retesting the breakout seen last week, but a creep along a trendline is an indication that price is going to break through.

The picture for silver is an image of frustration, with the price threatening to get over 22.10 only to be turned back down with the level seemingly now acting as resistance.

The relative strength of the USD will likely continue to weigh heavily. It is no coincidence that metals (and stocks) have recovered somewhat while the DXY has fallen toward the trendline, as seen in the chart below. Note how the dollar may be finding support at the bottom range of its well-established upward trend, with momentum looking to turn back up on the daily timeframe; this should have traders on the long side of a metals trade on alert for the short term.

Thanks and have a great week.

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