Gold and Silver Prices Face Make-or-Break Catalyst as Technicals Point to Bullish Trend
Gold and silver prices have been consolidating in the $4200-$4400 range for gold and $55-$78 for silver. This neutral stance is due to both metals having plenty of room between support and resistance levels.
The log chart analysis suggests a potential path similar to 2008, with a sooner rally to new highs rather than a multi-year downturn. However, a catalyst is needed soon to break the holding pattern, or else metals could drift lower and potentially enter a 2011-type scenario.
Looking at the technical indicators, the daily moving averages (DMA) for gold are sloping upwards, which is typically bullish. However, if the price doesn't start moving up soon, both curves will start sloping down, becoming bearish.
The Comex open interest data shows that there has been an incredible washout of speculative money in both gold and silver. This leaves less opportunity for selling pressure to materialize, making it more likely for prices to rise further.