Gold and Silver Paring Losses this Friday

Simple Moving Average ( SMA ) 200-period (bold, gray)

RSI-14 with Simple Moving Average 5-period of RSI attached.

Fibonacci Study

Elliott Wave Principles

Market and Price Action (patterns, candlesticks)

Intraday pivots and Intermediate-term support and resistance

Multiple Time-frame Analysis

Gold Challenging its 2011 Bullish Momentum and Rising Channel (5/5)

Silver Retraces More than 50% of its 2011 Rally (5/5)

Gold (XAU/USD)

Short-Term to Medium Term

- Gold is consolidating after a sharp decline at a rising channelsupport seen in the 4H chart. The medium term bullish momentum is tested, as the RSI in the daily chart tests the 40 reading.

- It is likely that gold can continue its correction , but the declining structure is also likely to have completed a wave (iii), so a wave (iv) rally is anticipated.

- After that we can anticipate a decline towards the support cluster right beneath 1450 .

- However, if the current rally breaks back above 1520 , be ready for the bullish continuation .

- In the medium term, if the market can rally back above the 1575 high, 1585 is the near-term target, then the medium term target is at least 1650 , which is a swing projection from the 61.8% retracement level seen in the 4H chart.

Silver (XAG/USD)

Short-Term to Medium Term

- Silver has retraced more than 61.8% of its 2011 rally . If the market extends further, there is a cluster of support near 31.20 pivot, 78.6% retracement and the 200SMA in the daily chart.

- The RSI in the daily fell below 30, and shows that silver has more bearish momentum than gold.

- Support can be expected in the 31-31.20 area. This Friday however, the market is paring the sharp slide.

- A 38.2% retracement at 40.00 can see resistance .

- If that is broken, 42.00resistance cluster should keep silver capped.

- When comparing gold to silver, a risk-off, safe haven move in the markets will now probably favor gold. It has favored silver so far this year, but this volatility in silver is a concern for safe haven seekers.

- Silver's rally is vulnerable to fading since it would be in the context of a consolidation until it can clear 50 .

- If the decline continues through 31.00 , silver can retrace the entire 2011 rally .

Will Silver now take the backseat to Gold, or is this volatility going both ways? Subscribe and become a member to shareyour views and join live discussions as well as webinars about the markets.

Fan Yang CMT

Chief Technical Strategist


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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