Technical Analysis of Gold Price
Gold Price Chart
The gold price has started to make a move to the upside. In this article, we present the technical analysis of gold price as well as silver. In our previous article on the technical analysis of the gold market, we said that the gold market and silver are in a corrective phase and that further price gains are likely after the correction. Well, the correction on gold price chart might have ended and gold has started to head on to higher prices. The ending of the correction on silver is not clear enough though.
First, here’s the gold price chart. This is a daily chart and it shows the corrective wave ii as ended at 1636.00. This wave ii is a double zig-zag and it retraced wave i by almost 61.8% which is a normal retracement level. The current wave in progress is wave iii with a target of 2070. This projection is 1.62 of wave i. The confirmation that wave iii is indeed in progress will be obtained when the gold price moves above the corrective channel (in amber) and impulsive upwards waves are established. What we have now are just the first few upwards waves and it looks impulsive but the gold price needs to put in a few more waves to confirm that further upside can be expected.
It could be that the correction is still in progress with an expanding triangle (bounded by the red lines). That is the reason why it is better to wait for the a confirmation of a clear breakout before getting into the gold market. The target for the expanding triangle is around 1600 before gold prices is expected to rise to 2070.
Silver Price Chart
In this section, we present the silver technical analysis. The silver price chart shows that the silver market is in a corrective phase as well. The difference between the corrective phase of gold price chart and silver is that for silver, it is more likely a standard 5-3-5 zig-zag as opposed to a double zig-zag in gold. With that in mind, when we take a look at the details of the last wave, we can see that silver is likely in a corrective wave four of the final five waves. This means that one last wave down is needed to complete the 5-3-5. That is the reason why I think that it is better to wait out a couple of weeks before turning bullish on gold and silver.
The target for the down side is at 29.50 to end the correction before silver heads higher to around 45 to complete wave iii.