Precious metals - finding their bottoms

12 בנוב׳

After the rise, comes the fall. Gold sold off again this morning. Has it found a bottom? Less than a fortnight ago, gold was trading at all-time highs and within sight of $2,800. It pulled back from what were fairly overbought levels. It then looked as if it may repeat the consolidation process which took place over the last two weeks of August and the first two weeks of September. This was when gold went sideways, trading in a narrow range which helped the daily MACD reset at lower levels, so setting gold up for the next stage of its bull run. Just last week, it looked as if gold was holding around $2,730, and looking to consolidate as it had done at the end of the summer. But Trump’s win was the trigger for a surge in bond yields and the dollar, and a sell-off in gold which has continued through to this morning, taking it back below $2,600 for the first time in seven weeks. If it can find support around current levels, then there’s an opportunity for the daily MACD to flatten out. This could then set the stage for a rally. Otherwise, it may need to fall further until it becomes oversold again. It’s a similar story with silver. Bulls may take some encouragement that it has yet to break below $30. But this is a level to watch closely. A significant and protracted break below here could mean silver needs to fall further to find its base.