Forex: Gold and silver: Consolidation continues

Technical update

Forex: Gold and silver: Consolidation continues Monday, October 7th:_

Gold spot price

The XAU/USD last week initially declined from a 1351.95 high to the 1277.80 low, with the price finding strong support below the 1290.00 level and going on the rebound. The upwards movement accelerated on ECB president Mario Draghi’s comments that the central bank continues to be ready to use all measures to secure price stability. The gold/dollar pairing came back above the 50 percent Fibonacci retracement level of 1180.15 to 1433.61 at 1306.88 in a rebound helped by the daily MACD (9,12,1) convergence. Over the course of the week, gold shed 2.59 percent, closing at 1310.50.

Since last Wednesday the price has been trading around the 23.6 percent Fibo of 1433.61 to 1277.80 at 1314.33.

Asian trading today opened at 1314.05, with a subsequent intraday high so ffar at 1316.05 and low at 1308.44. At the moment the price is trading at 1312.00.

The 1300.00 level presents as strong support and may be the base for an eventual uptrend.

Silver spot price

During the week just passed, the XAG/USD broke out of the flag pattern which had been formed by eight daily candles. The price fell to test the 22 July high of 20.59, where strong support was marshalled and silver rebounded with the help of the MACD (9,12,1) convergence on the daily chart. The price rose to continue a consolidation above the 50 percent Fibo of 18.19 to 25.09 at 21.64, with a rebound also to the 23.6 percent Fibo of 25.09 to 20.59 at 21.65.

So far today, the XAG/USD has been trading within the range 21.61 to 21.86 and is right now quoting at 21.72.

The 21.00-22.00 area has marked the boundaries of the price action since 12 September, not letting the price trade for long below that zone. The evident bullish pressure coming from below may compel the price to climb though, within what would prove to be an eventual uptrend.

0 Brokers added for comparison:
Clear all