Correction on the Precious Metals Advance
World stocks hit all-time high so we can say that there is a full risk on mode on the market right now. What is more, since the 8th of September, the USD is undergoing a bullish correction. All that together does not create a nice environment for the precious metals. The situation that stocks and the dollar are higher makes the Gold and Silver automatically weaker.
The drop on both charts does not seem contagious so far. On Silver and Gold, the price is locked inside the wedge pattern (black lines). Wedge is a trend continuation pattern and the price, in the long-term, is still making higher highs and lows, which makes this situation bullish. In addition to that, XAUUSD and XAGUSD are above major long-term supports, 1306 USD/oz (green) and 16,8$/oz (yellow), respectively.
On the other hand, bears can benefit in the short-term from the breakout of the local horizontal supports on the 17,6 $/oz (Silver, grey) and 1323 $/oz ( Gold, yellow) and the breakout of the mid-term uptrend lines. Taking all that into the consideration, in the next few days, the chances for a bearish movement are higher. When we are talking about the perspective for the forthcoming weeks, the buyers still have higher odds for a success.
This article is written by Tomasz Wisniewski, a senior analyst at Alpari Research & Analysis