Gold 4H chart 9:40AM EDT 9/21/2012
Gold 1H chart 9:43AM EDT 9/21/2012
If there is a throwback, which is possible with the 1H chart showing some overbought condition, as the RSI goes above 70. However, we should first monitor the 1775-1780 previous resistance area as a possible area of support. I think as long as the market holds above 1765, which is like a central pivot to this week’s range, then the bias is still bullish. The 1H RSI should also stay above 40 in the bullish scenario. Otherwise, a break below 1765 suggests further consolidation, and points to bearish intent after a false bullish breakout.
Silver 4H chart 9:48AM EDT 9/21/2012
Silver has also been consolidating through the week, holding the bullish bias just like in the gold 4H chart. XAG/USD is also breaking into new highs for the week, tagging 35. The RSI held above 40, and looks like it is in the process of breaking back above 60, which suggests revival of momentum. The bullish outlook focuses on a resistance pivot at 35.66, made in Oct, 2011. More importantly, the bullish continuation has the 2012-high of 37.50 made in February as a target. If there is a throwback, a hold above 34.25 should hold the bullish bias. A break below 34.00 however suggests further consolidation, and maybe even a corrective bearish attempt to follow a false break to the upside.