Breakouts or Pullbacks

Gold Price Bearish Outlook

1-Hour Gold Futures Chart

Gold is bearish in the short term. It sure looks like an ABC correction is underway. It could be a flat ABC where wave C = A, and that would target $2888 for the bottom. However, another standard ABC correction would target $2841 if wave C = 1.618*A.
The momentum indicators have also clearly turned down, with room to fall further in wave C.

Alternatively, this ABC could be an impulsive 5 waves down, which means even lower than $2841. But that is a lower probability until proven otherwise.
All of this will be redundant if and when Gold breaks $2964.

Momentum Indicators and Gold Price Analysis

4-Hour Gold Futures Chart

Negative divergences continue to pile up on the 4-Hour chart while the Gold price remains elevated. Either the divergences finally catch up to Gold and it heads south or Gold breaks the divergences and slices through $2964 to new higher highs.

Daily Chart - Gold Futures

The moving averages continue to trend higher, so the trend remains positive. However, the RSI and the MACD Histogram have turned down and are negatively divergent.

The most interesting development is that the MACD Line in blue is on the verge of breaking its signal line in red. This would be bearish and signal a bigger drop ahead. Keep an eye on this one!

Long-term Gold Price Trend Remains Positive

Weekly Chart - Gold Futures

The upward trend is very much intact on the weekly chart…BUT the RSI is coming off extreme overbought levels and negatively divergent. The same goes for both MACDs.

The trend is your friend until it isn’t, and for this trend to turn down, we would need to see a breakdown out of the blue channel, which is currently $2730. That’s a long way down from $2960.

Lastly, we got a clear negatively divergent higher high based on sentiment today.

Gold Price Analysis: Key Takeaways

There are plenty of risks to the downside in the short term, but the overall trend remains up. This suggests that Gold could have a healthy pullback, then up we go again. Only a break of $2730 can change that.

Silver Price Correction Underway

2-Hour Chart - Silver Futures

Looks like an A-B-C correction is underway. A break of $34.24 would negate that and send Silver skyward. Until then, wave C appears to be underway and we are just waiting for confirmation of the peak of ii before iii down follows.

The target on the downside is $31.60, where wave C equals the same size as wave A.

Alternatively, if wave C is equivalent to 1.618*A, then the downside target is $30.50.

Then there is the possibility that this is not an ABC correction but 5 waves down, which could target support at $29.15.

The momentum indicators continue lower, which is bearish for now. But a break of those negative divergences would send Silver higher again.

Silver Price Potential Breakout Scenarios

4-Hour Chart - Silver Futures

This is a perfect example of how multiple negative divergences across multiple indicators finally take down price. However, the drop in Silver is relatively benign so far, and the momentum indicators have come down significantly. If they break those divergences, Silver could fly above $34.24.

Daily Chart - Silver Futures

If this is an ABC correction, then $28.32 is where C = A. $24.66 (666) is where C = 1.618*A.

However, a break of $34.24, and confirmation above $35.07, could signal $40 next.

Weekly Chart - Silver Futures

Negative divergences across all indicators signaled the top in Silver at $35.07. The RSI and both MACDs are curling up. Above there and $40 is in the crosshairs.

Silver Price Analysis: Key Takeaways

A break of $34.24, followed by conformation above $35.07, would open the doors for the $40s for the first time in well over a decade.

But in the meantime, risks remain to the downside, to perhaps as much as $24.66 or more. Lower highs and lower lows would be Silver’s kryptonite.

Buy gold and buy silver today to secure your financial future.