Today we are taking our weekly look at the charts for gold and silver.
After what has been the most unusual campaign season for both candidates, election day has finally arrived.
Regardless of your political persuasions, both gold and silver look to be setting up for an explosive move higher.
First let’s take a look at the gold price chart…
After pulling back from its all-time high of approx. $2,065, gold has consolidated and seems to have formed a nice base. It has been trading in a range between approximately $1,860 and $1,930, with the lower support level proving strong.
The uncertainty of the election result, coupled with the indecision of the next stimulus package has left many investors on the side lines for now, but we are seeing some bullish signals building. Having bounced off the $1,860 support level gold looks set to retest both short term resistance (approx. $1,910) and the converging 20 day and 50 day moving averages.
A Drawn-Out or Contested Election Result Would Weigh Heavily on Markets
A clear break above these levels could see momentum buying testing the $1,930 level and then $1,975 and beyond and signal the next leg higher in this bull market.
However, a drawn out or contested election result would weigh heavily on stock markets and by extension precious metals markets and push gold lower to test the $1,860 level. A close below this level opens up a retracement to $1,810 or even a test of the 200 day moving average at $1,775.
While not as clear cut as the gold chart, silver is showing some bullish signals also.
Silver has traded recently in a range between approximately $22.80 and $25.00. More recently the $24.40 level has proved to be decent resistance to a move higher. The 20 day and 50 day moving averages are converging slower than gold due to the additional volatility that we always see in silver, however the downward sloping resistance line has been tested a few times and has held well.
Silver to Quickly Move Above $27
If the precious metals markets were to take positive signal from the election process and result, a break above the $25.00 level is on the cards in the short-term with a relatively quick move higher to $27.00 and above.
However, the trend support line that has been in place since the March lows was recently breached showing that silver could still be vulnerable to a move lower. And a close below $22.80 exposes us to the fact that there is little technical support before $19.50.
The markets do not like indecision. Lack of clarity will cause increased volatility over the next few weeks. Regardless of which candidate wins the long term prospects for both gold and silver are solid but in the short-term there may be some short lived storms as the bulls and bears fight for supremacy in the precious metals markets.
NEWS and COMMENTARY
GOLD PRICES (USD, GBP & EUR – AM/ PM LBMA Fix)
02-Nov-20 1886.75 1889.90 1460.34 1463.16 1620.72 1624.50
30-Oct-20 1875.80 1881.85 1448.12 1453.92 1607.19 1611.24
29-Oct-20 1876.85 1870.30 1444.24 1447.05 1600.58 1601.16
28-Oct-20 1896.85 1869.95 1461.71 1439.30 1614.22 1593.38
27-Oct-20 1898.90 1905.70 1458.73 1461.29 1607.80 1611.60
26-Oct-20 1901.60 1898.45 1456.44 1460.29 1609.70 1607.61
23-Oct-20 1910.60 1903.65 1458.74 1457.05 1612.36 1608.20
22-Oct-20 1916.85 1900.95 1463.71 1451.76 1618.97 1608.39
21-Oct-20 1918.95 1924.15 1470.68 1466.59 1619.98 1622.44
20-Oct-20 1906.35 1898.40 1469.61 1464.05 1615.44 1606.43
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