US GDP as Catalyst – Daily View 28th May

Bullion Daily

The following information is a guideline (trading plan) and should not be treated as financial advice. Not advice but banter and active in sharing trade ideas via twitter @sugardaddyFED

Dip buying and bargain hunters showed up at 1183 levels and today gold managed to break above 1190. However, gold has a mountain to climb with key resistances that it broke on the impulsive sell off. We will not rule out a retest lower in the short time frame and should 1183 hold we could see gold trying to advance higher. Failure to hold 1183 then 1178 and 1168 will be the next support.

The dollar index goes from strength to strength as the Japanese Yen continue to devalue, stifling any fertile ground for gold price to react higher. Federal Reserve hawkish remark and clear statement by Miss Yellen on an imminent interest rate hike has given dollar bull another lifeline. We continue to question if this is sustainable in the short to medium term. The dollar index could still test higher – possibly a triple top?

All eyes are on US GDP numbers that are due tomorrow and today we may see volatility on the back of US initial jobless claims.

Below are key levels that we will continue to monitor and this will change depending on price action.

Daily Resistance Levels:

  • Previous high at 1232.31
  • DMAs 200 at 1214.7 / 100 at 1212.417 / 50 at 1197.74 and 20 at 1200.33
  • 13th May low at 1191.17

Daily Support Levels:

  • Fib level at 1184.15
  • 11th May 1178.78

Buyers are holding up the price at 16.60 to 16.80 levels but we continue to see one more flush lower given the current US dollar strength. The 50% Fib retracement line is playing a great support as well as the 50 DMA at 16.60. Break below that, Silver could both instigate a free fall or a dump and pump depending on what data and how the dollar reacts. We continue to watch how the RSI indicator could give clue to the next move.

A break lower will find support at the following key levels 16.40 -16.60 which is a potential fertile area for longs to build on. On the daily, those levels hold the 50% and 61.8% Fib retracement area which should provide decent support. This also coincides with the rising orange channel line that should keep the run higher intact for now. Note the red AB – CD line could play out in the short medium time frame. To highlight the downside risk, a break below 16.08 will spell big trouble for Silver as it opens up the possibility to retest 15.85 levels.

Below are key levels that we will continue to monitor and this will change depending on price action.

Daily Resistance Levels:

  • Previous daily high at 17.75
  • Psychological level at 18.00
  • Downtrend line that coincide with 18.00
  • 200 ma at 16.93, 100 ma at 16.67, 20 ma at 16.81

Daily Support Levels:

  • Several key DMA levels 100 at 16.60
  • Fib retracement level 50% at 16.66 and 38.2% at 16.40

Platinum is threading on a thin line as price action is now below all MA and the lack of buyers are a real concern. Support from the green line was not perfect and slightly broken with a low registered at 1114.5. Prospect of any upside seems limited and a break below 1110 should give the bears the ultimate momentum to trigger stops. To alleviate further selling, a strong green candle is needed soon.

Below are key levels that we will continue to monitor and this will change depending on price action.

Daily Resistance levels:

  • Previous daily high at 1177.1
  • 100 dma at 1174.79 / 50 at 1145.6 and 20 at 1145.64

Daily Support levels:

  • May low at 1121.1
  • April low at 1117
  • March low 1113.7

Yesterday price action was an inside day and failure to break and close above 787.1 should allow the bears more room to test lower. Upside continue to be limited as a lower high and lower low is created in this wedge (or bull flag?). The chart remains hard to read but we maintain a semi bearish stance here until we see a breakout.

Only a break above 801 will give the bulls the confidence to test higher prices. Current price action is dominated by sellers.

Below are key levels that we will continue to monitor and this will change depending on price action.

Daily Resistance levels:

  • Previous daily high at 801.6 and 797.6
  • 200 dma at 793.96 / 100 at 779.84 / 20 at 782.74
  • Downtrend line (see the shaded brown zone)

Daily Support levels:

  • DMAs 50 at 771.35
  • Fib retracement levels 38.2% at 771.5 / 50% at 762.3
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