(Kitco News) – Despite last week’s late rally, gold and silver prices are stuck in a sideways trading pattern to start the week, but further declines in the U.S. dollar should be the catalyst needed to get them trending higher once again, according to analysts at ActionForex.
“Both Gold and Silver are currently still caught in near-term consolidations despite the rally late last week,” the analysts wrote. “Both metals have the potential to extend their recent gains, but a more pronounced decline in Dollar may be necessary to provide the needed momentum.”
The analysts expect gold to begin rallying once again as long as the yellow metal holds support at $2,470.72. “Firm break of 2531.57 will resume the long term up trend and extend the record run,” they said.
“Next target is 61.8% projection of 1984.05 to 2449.83 from 2293.45 at 2581.30,” they added. “However, break of 2470.72 will risk deeper pull back to 55 D EMA (now at 2412.87) first.”
Turning to the silver charts, the analysts noted that silver prices have continued to lag gold’s standout performance, but the gray metal could catch up soon.
“Corrective pattern from 32.50 has likely completed with three waves down to 26.44, after defending 26.12 resistance turned support,” they wrote.
“For now, further rise is in favor as long as 28.76 support holds,” they added. “Break of 29.94 will target 31.73 resistance. Decisive break there will solidify this view and target 32.50 and above. However, break of 28.76 will dampen this immediate bullish case.”
