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Gold & Silver Not Going Anywhere Fast In 2018 - Technical Outlook

Kitco News


Editor's Note:View Kitco News' full 2018 outlook coverage

(Kitco News) - As of this writing in mid-December, the gold futures market was about $100 higher than at the beginning of 2017. The monthly continuation chart for nearby Comex gold futures shows that trading has been choppy and sideways for the past two years.

From a longer-term trend perspective, price history dating back over 40 years shows the gold market experienced a price uptrend from 1976 to 1980. A downtrend occurred from 1980 to 1985 (with an upside correction within the downtrend in 1982. From 1985 until 1987, a price uptrend occurred. From 1987 until 1993 a gentle price downtrend occurred. Prices traded sideways from 1993 until 1996 and were in a downtrend form 1996 until 1999. Prices then traded sideways until 2001, and then embarked upon a powerful 10-year uptrend that produced an all-time high of $1,908.60 in 2011. And then from 2011 until 2015 prices trended solidly lower.

Since 2015 gold prices have traded sideways. The monthly gold chart at present is not bullish and it’s not bearish, either. That suggests the outlook for gold in the coming new year is for more of the same—trending more sideways in the coming months than either up or down.

It will take a move in nearby gold futures prices above longer-term technical resistance at the 2014 high of $1,389.00, basis nearby futures, to provide the bulls with the longer-term technical strength to suggest a longer-term price uptrend (measured in years) can be sustained. It will take a price move below the 2015 low of $1,051.00 to produce the longer-term technical damage to suggest a years-long price downtrend.

February gold futures last traded at $1,266 an ounce, up almost 10% since the start of the year.

Silver Prices Also Trapped in a Trading Range

Meantime, the monthly continuation chart for nearby Comex silver futures shows that prices are also in the middle of a wide trading range, bound by longer-term chart resistance at the 2016 high of $20.825 and by the 2015 low of $13.666.

March silver futures last traded at $16.175 an ounce, slightly more than 1% since the start of 2017.

Like the gold monthly chart, silver’s long-term technical posture favors neither the bulls nor the bears. The monthly chart also suggests that in 2018 silver prices will trade in a range. This longer-term chart does slightly hint that silver prices could drift a bit lower in the coming months, possibly even challenging the 2015 low.

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.
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