Gold & Silver Update March 2015 (D)
Created on Thursday, 12 March 2015 01:26
Written by Austin Galt
The price of gold and silver is now right in the zone marked for low in previous analysis. I expect a big rally to new rally highs now so let’s take a quick look at how things currently stand using the daily charts beginning with gold.
GOLD DAILY CHART
Let’s get the lower indicators out of the way first. The Relative Strength Indicator (RSI) is in oversold territory while the Stochastic indicator has just made a bullish crossover so conditions are ripe for a rally.
The moving averages with time periods of 50 (blue) and 100 (red) are bullish with the blue line above the red line.
I have drawn an uptrend line connecting the November 2014 and January 2015 lows. Breaking this trend line has got the crowd overwhelmingly bearish. Perfect conditions for the next rally leg to get underway!
I have added Fibonacci retracement levels of the move up from November 2014 low to recent high and price has just clipped the 88.6% level so that really should be it if a rally really is set to occur.
I have drawn a horizontal line denoting the December 2014 which I outlined as major support and price has failed to take out this level. Nice.
Also, from previous monthly analysis, we know the monthly Parabolic Stop and Reverse (PSAR) support is at US$1143 and price has held that critical support. Nice again.
Also, we knew from previous analysis that timing suggested the 11th March was a key date to watch for a turn. It looks like we’ve got a direct hit here.
And, as you will know from my email update, the intraday chart showed a “three strikes and you’re out” low formation.
So, the low yesterday at US$1147.46 satisfied the three major technical components – pattern, price and time.
Now for the rally!
Let’s move on to silver.
SILVER DAILY CHART
The lower indicators are virtually identical to that of gold. The RSI is oversold while the Stochastic has just made a bullish crossover.
The 50 period moving average (blue) is above the 100 moving average (red) indicating bullish conditions.
I have added Fibonacci retracement levels of the move up from December 2014 low to recent high and the low clipped the 76.4% level which was the expectation laid out in previous analysis. Nice.
I have also added a Fibonacci Fan and we were looking for the low to be around support from the 88.6% angle. Nice again.
So the low yesterday at US$15.27 looks to be the one. Now we just await confirmation in the form of a price rally.
And once the rally is off and away we can look more closely at where the rally is likely to end. Until then…