On Monday, the prices of gold and silver experienced a decline; what does this mean for the near-term outlook?
What’s Happening with Gold and Silver Prices?
Gold’s Technical Landscape
Gold prices are currently moving without a clear direction. If we look at the chart, we can see that gold is consolidating between a falling trendline from July and rising support from February. Basically, the price of gold hasn’t changed much since mid-2020.
But here’s the thing: as time goes by, gold is running out of space to consolidate between support and resistance. This means that the breakout direction will be important for determining the future trend. Keep an eye on the August low of 1884.89 as a key support level. On the other hand, resistance can be found at the 23.6% Fibonacci retracement level of 1971.63.
Silver’s Similar Situation
Silver is facing a similar situation to gold. Like gold, silver is consolidating between rising support and resistance. However, there is still plenty of room for sideways price movement in silver. This means that silver could remain directionless for a longer period of time compared to gold.
On Monday, silver dropped to the midpoint of the Fibonacci retracement level at 23.02. It is also just above rising support from the end of last year. If there is a significant breakout, it will likely involve a drop below the 61.8% Fibonacci retracement level of 22.29.
This would expose the 78.6% point at 21.24. On the other hand, if silver turns higher, the focus will be on the 38.2% level at 23.75. Just above that is the falling zone of resistance since May.