Gold Corrects But Bulls Still Stronger
Suyog Chandak | Jun 11, 2017 08:55
Gold:
Gold has sold off this week after rallying higher for 3 straight weeks. We see a double top in gold where it was unable to break the year highs. It is important to note that this may not be the end of the entire rally and could be only a price correction. We see that gold is very close to previous resistance which could act as support. With the Fed Interest rate decision this week, gold could have significant price action and it could decide the direction for gold for the next few weeks.
Gold looks promising to begin a leg higher and every dip could be a buying opportunity.
I expect gold to come off the 1260-1268 area next week and bounce back towards highs. It is also important to note that gold is in an ascending wedge and longs look good till the time it does not break the low of the wedge.
Silver:
Silver sold off from previous support which acted as resistance. Unlike gold, silver still seems to be in tricky waters. Silver could get towards the $17 region before bouncing back higher. Currently, it is holding on to the trendline and may be forming a wedge here. With Fed this week, the direction for silver could be decided this week. Also, it is important to keep in mind all the political risk looming around which could significantly help silver.
For the longer term, silver needs to break the $19 region to trigger a move higher. A break of the $19 region could trigger prices as high as $21.7 and eventually $26.
While silver is still trading in the $16-$19 channel, no significant move is expected and silver may trade in a choppy fashion with several whipsaws.
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