Precious metals broadly higher

Following the US cash open, we can see precious metals have been broadly bid today.

The price of spot gold (XAU/USD) and spot silver (XAG/USD) are +1.7% and +2.8% higher, respectively, at the time of writing. Despite UST yields advancing and the Dollar Index offering very little, both gold and silver are outperforming!

Resistance is limited on gold, paving the way forward to challenge those all-time highs around the $2,150ish neighbourhood. The FP Markets Research Team released a post on the yellow metal for the week ahead.

Technical picture for XAG/USD

As for the price of silver, technical studies show longer-term price action nearing weekly resistance formed between $24.48 and $24.03. This follows a rebound from weekly support at $22.16 in mid-February.

Drilling down to the daily timeframe, we can also see silver offering interesting price action. On the one hand, we have a complex inverted Head and Shoulders pattern in play; the left shoulder resides at the low of $22.47 (11 Jan), the double heads can be located around the lows of $21.91, the right shoulder can be found at the low of $22.27 (28 Feb) and the neckline is extended from the $23.53 12 January high. For chart pattern enthusiasts, you will also acknowledge the double-bottom pattern formed from the heads of the complex inverted Head and Shoulders at around $21.91 (the neckline for this pattern is found at the high of $23.32 [31 Jan]). However, in order for price to reach the double-bottom pattern’s profit objective at $24.71 or the inverted Head and Shoulders pattern profit objective at $25.07, we would need to probe current weekly resistance.

From the H1 timeframe, recent movement overthrew resistance at $23.52 (now marked support) and cleared offers for a possible approach to resistance from $23.97. What’s interesting here is this H1 resistance resides a whisker south of the weekly chart’s resistance zone highlighted above between $24.48 and $24.03.

XAG/USD bulls to remain in control?

According to the weekly, Daily and H1 timeframes, bulls are poised to remain at the wheel at least until reaching the H1 resistance/weekly resistance zone. Once, or indeed if, we reach the aforesaid resistances, sellers could make a show. However, should further buying beyond the resistance levels come to fruition, the area between the double-bottom pattern’s profit objective at $24.71 and the inverted Head and Shoulders pattern profit objective at $25.07 would likely be seen as the next upside objective.