It’s been a while since we’ve issued a Precious Metals update, so today we wanted to reiterate our risk management levels and targets on both the weekly and daily timeframes.
Let’s start with a weekly chart of Gold. Our level has been roughly 37,000 and prices continue to consolidate well above it, working off the overbought conditions in RSI. As long as prices are above that level on a weekly closing basis then the structural trend is higher and our longer-term price objective of 44,500 remains intact.
Click on chart to enlarge view.
On the daily timeframe, Gold has consolidated below our secondary price objective of 38,500. With that being said, momentum has stayed out of oversold territory and prices are now pushing back towards the top of their range. A break above 38,500 would reignite this intermediate-term uptrend and indicate the move towards our 43,000 target has begun.
Silver in the middle of our risk management level (40,500) and resistance which was confirmed several months ago near 49,500. From a structural perspective, this trend is sideways at best until we get a breakout above 49,500, but from a short-term perspective, price and momentum continue to improve.
Here’s a look at Silver’s daily chart. Prices held support at 43,575 and momentum stayed out of oversold territory, suggesting to us that a test of its year-to-date highs at 48,650 is coming. If you want to be cute and play for a move up towards that level you can, as long as prices stay above 43,575. With that being said, the longer-term breakout has yet to confirm but would with a move above 48,650. Let’s take it one step at a time…
Overall the action in Gold and Silver remains extremely constructive in the face of weak Base Metals. If you’re looking to play Precious Metals on the long side then these are the ways we’d be skewing the reward/risk in our favor, both structurally and tactically.
Thanks for reading and please let us know if you have any questions.