Gold outlook remains negative [Video]

Jason Sen DayTradeIdeas.co.uk

Gold

Gold broke last week's low at the 3970/60 target as expected.

We hit a new low at 3943 but then reversed for a short term recovery which was stronger than expected.

We beat resistance at 3960/3970 & shorts stopped above 3985 to target 4000/4010 & resistance at 4044/4049.

Unfortunately we spiked above 4055 before collapsing from 4062, which was frustrating.

We have collapsed again as expected back to 4020/16, 3990/3980 & are about to retest last week's low at 3970/60

Again, I do not see this as an important support level.

Just be aware that a break below here this week can target 3930/3920 (we got close yesterday) then 3890/3880.

Eventually a move as far as 3870/60 is possible.

Gains are likely to be limited with first resistance at 4005/4010 & shorts need stops above 4015.

I expect strong resistance at 4040/4050 & shorts need stops above 4060.

Silver

Silver made a high for the day exactly at my sell opportunity at 6045/6075 & shorts worked perfectly as we collapsed to 5970/50, 5900/5880 and 5790/5760 over night.

Outlook remains negative in the bear trend of course & a retest of last week's low at 5590/5550 is looking more likely despite yesterday's short term recovery.

Further losses this week meet 4.5 month trend line support at 5465/5425.

I would not say that this is strong support and as we gain momentum to the downside longs could be risky. If you want to bet on a bounce then use a stop below 5390.

Of course a break below here then sees 5425/5465 act as a resistance targeting 5370/50 & 5320/10, probably as far as 5250/5240.

Below here look 5190/5170.

Again gains are likely to be limited in what I think is a short term bear flag pattern.

Minor resistance at 580/5850 & shorts need stops above 5890.

A break higher meets my sell opportunity at 6045/6075 & shorts need stops above 6120.

Author

Jason Sen

DayTradeIdeas.co.uk

Jason Sen began his career in the options pits on the trading floor of LIFFE in 1987 at the age of 19, making markets on his own account. In 2001 when the trading floor closed he successfully made the transition to day trading on computer screens.

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