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Gold & Silver; Short-Lived Rebound

ByCommodityOnline
Published 07/10/2013, 02:44 AM
Updated 05/14/2017, 06:45 AM
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The rebound in gold prices must be treated cautiously- rising prices could just be a smoke screen to what could be coming next. Such corrective rebound may prove short-lived as the market continues to monitor speech made by ECB Mr Draghi as well as Fed’s Chairman Mr Bernanke. We felt that gold need to find a strong support before it can retest resistance that is currently set at $ 1236 / $ 1269 area.

A retest of previous low or at $ 1200 could well be the catalysts for a meaningful reversal. We need to see more evidence of selling exhaustion before taking any long positions. With the rally in US dollar pretty much intact, it is far too risky to buy the yellow metal. Shorting the metal is far more favourable as it could retest $ 1180 and should it break lower, we see $ 1155 as the next target.
Gold Spot
Resistance: $1240, $1269, $ 1300
Support: $ 1207, $ 1200, $ 1180

Traders Notes: Dip buyers are cautiously buying with a stop loss at $ 1150 – buying area is $ 1180 / $ 1200 / $ 1225 to go long. Expect a short period of short covering before the market resume lower.

Given the weakness in US dollar index (consolidating), silver prices benefited and dip buyers were around to push it as high as $ 19.31. The white metal started off from last week low of $ 18.75 and managed to keep its gain above $ 19.00 area.

However, the downtrend still persists and we fear that the rebound will be short lived. Any rallies must be sold but we are also aware that the market is near a bottom before it looks to consolidate in this downtrend. With gold prospect being negative, Silver prices fare no better in the short and medium term.
Silver Spot
Resistance: $ 20.11, $ 20.44, $ 21.59
Support: $ 18.20, $ 18.00

Traders Notes: Stay on the side line.

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