On Wednesday last week, I wrote: "The bottom of the yellow highlighted boxes are where I believe prices may find support.”
Gold is holding the $1965 level, whereas the bottom of the yellow box (updated on the daily timeframe below) corresponds with a breach of $1950. As hardened metals traders know, a breach of a psychological level often occurs prior to the beginnings of a next leg up.
As I also noted last week, signs of a bottom could manifest quickly. Less than four trading days later and gold is in the oversold condition on the daily timeframe, with the upward trend yet intact. Whether or not a breach of $1950 will occur is a question for a fortune teller. Still, in my opinion, as of now, such an occurrence presents the buying opportunity any sidelined bulls were waiting for.
Silver which has been holding up better than gold (until early this morning), is closer to the bottom of the highlighted box I presented last week.
In hindsight, the psychological downside level for silver seems lower than $24.50 (shown again above). Will the metal see $23.80 before turning around? Another question for a fortune teller, but like with gold – in my opinion, lower prices in the short term would only be a better buying opportunity until proven otherwise. The greater upward trend remains intact, with bearish momentum at risk of sputtering.
An update on the stock market with what should be the all too familiar (to regular readers) weekly S&P futures chart below; The 4195 level I have been pointing to for months continues to provide resistance - after my suggestion (in late March) that the level would be tested again prior to weekly momentum topping out; it hit 4198 on the nose at its high last week.
Thanks, and good luck,
