(Kitco News) – Precious metals saw a sharp bearish correction last week, but prices are rebounding this week with silver leading the pack, according to Kim Cramer Larsson, Technical Analyst at Saxo Bank.
“Gold (XAUUSD) seems to be bouncing from the cloud (shaded area—the Ichimoku Cloud) between the 0.618 and the 0.786 retracement, and the minor support at around 2,326,” Larsson wrote. “A dip down to the 0.786 retracement at 2,314 could still occur before rebounding.”
Larsson said that if the gold price breaks above $2,385 per ounce, the prior uptrend is likely back on track with potential to target $2,500. “The 55-day moving average will add to the bullish support,” he said, whereas “A close below 2,277 confirms a downtrend.”
He added that the RSI is indicating a divergence, which suggests that the uptrend could be in exhaustion mode. “However, a close back above the 60 threshold and above the upper falling trendline would be a strong indication of another bullish push in gold,” he said.
Turning to silver, Larsson noted that spot silver (XAGUSD) has bounced from the 0.382 Fibonacci retracement at $30 per ounce, and he believes the gray metal is likely to resume its uptrend.
“Daily RSI is still showing positive sentiment with no divergence, indicating silver could push to levels above 32.52,” he wrote.
Looking at the weekly chart, Larsson said that “If it takes out 32.52, there is no strong resistance until around 34.40–35.40.”
“A break below 30 could continue the correction down to the 0.618 retracement at 28.50,” he concluded.
Gold prices are continuing to hold their earlier gains, with spot gold last trading at $2,351.37 per ounce for a gain of 0.74% on the session.
Silver, meanwhile, continues to lead the metals complex on Monday, with spot silver last trading at $31.522 per ounce, up nearly 4 full percentage points on the daily chart.
