Break-out signs in precious metals?
Like other markets, trade in gold has been subdued and is likely to remain so as many US participants extend yesterday’s Thanksgiving holiday into the weekend. There has been little change in geopolitical events and no catalyst to move gold either up or down. So it continues to consolidate just below the key $2,000/2,010 area of resistance. We have seen a bounce-back in bond yields this morning with the yield in the 10-year US Treasury now at 4.47%. It briefly touched 4.37% on Wednesday. Higher US yields generally support the dollar, which in turn can put downward pressure on the dollar-denominated commodities. But given how far bond yields have fallen over the last four weeks (the 10-year breached 5% this time last month) some kind of reversal should be expected.
It could be that silver, gold’s volatile little brother, will prove to be key in triggering the next big move. Silver was a touch lower this morning, but it remained within spitting distance of its own significant resistance around $24. Rejection here could result in another pull-back for both metals, while a strong break above $24 could be the catalyst for a decent rally.
That appears to have happened this afternoon as silver surged above $24 to close out above $24.30. This is its highest level since the beginning of September. As you can see from the 4-hour chart above, the MACD has turned upwards. If it can hold $24 on any pull-back then the outlook is looking positive. Gold also managed to close above its lower band of resistance of $2,000. Next week may prove pivotal for what happens going into the year-end.
It could be that silver, gold’s volatile little brother, will prove to be key in triggering the next big move. Silver was a touch lower this morning, but it remained within spitting distance of its own significant resistance around $24. Rejection here could result in another pull-back for both metals, while a strong break above $24 could be the catalyst for a decent rally.
That appears to have happened this afternoon as silver surged above $24 to close out above $24.30. This is its highest level since the beginning of September. As you can see from the 4-hour chart above, the MACD has turned upwards. If it can hold $24 on any pull-back then the outlook is looking positive. Gold also managed to close above its lower band of resistance of $2,000. Next week may prove pivotal for what happens going into the year-end.
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