The Conditions on Gold and Silver Become Precarious

GOLD (XAUUSD)
Dominant Bias: Bearish
The long-term bias on Gold is bearish, but the medium-term bias is bullish. Even the medium-term bullish bias has been put in a precarious condition, because price has been trending downwards this week. Any movement below the support level at 1187.00 would make it illogical to seek long trades, while a movement below the support level at 1185.00 would result in further strengthening of the selling pressure in the market. It is now clear that this precious metal can no longer trend significantly upwards this year, and as a result of this, further southward movement might be anticipated, while rallies would be seen as good opportunities to sell short. The bearish outlook may hold until January 2015 – a period when Gold could begin to rally seriously.

SILVER (XAGUSD)
Dominant Bias: Bearish
The selling pressure on Silver is even stronger than the selling pressure on Gold. Price trended upward last week, and then moved in a tight consolidation before it closed. This week, price has been dropping so far, having gone downwards by over 900 pips on Monday. The market is currently trading below the supply level at 16.5000, and a movement below the demand level at 15.5000 would signify increased seriousness of the selling pressure. Possible rallies can enable traders to sell the rallies, though the bulls may come back with a greater force in January 2015.

Source: Tallinex.com

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