Macro: Sandcastle economics
Invest wisely in Q3 2024: Discover SaxoStrats' insights on navigating a stable yet fragile global economy.
You can access both of our platforms from a single Saxo account.
Technical Update - Gold and Silver set for higher levels but correction looming. Ratio correction could be over
Kim Cramer Larsson
Technical Analyst, Saxo Bank
Summary: Gold range bound after reaching 2K but points to much higher levels. Silver in steep trend closing in on strong resistance.
Gold/Silver ratio in big correction that could soon be over.
Gold seems range bound between 1,934 and 2,010 and a break out is needed for direction. If breaking out to the downside it is likely merely just be a correction down to 0.618 retracement at 1,883 before uptrend resumes.
If breaking out to the upside there is short-term potential to previous highs around 2,078 which is also the 1.764 projection of the last larger correction.
Medium-term there is also RSI divergence but Gold trend is up, and if weekly RSI breaks above its falling trendline the divergence is likely to be cancelled (traded out) and Gold set for higher levels.
Monthly chart i.e., medium- to longer term: No RSI divergence and is still showing positive sentiment and if RSI closes back above 60 threshold it is a strong indication we will see much higher prices in gold.
If Gold closes above 2,075 there is potential to 2,245 – 2,352.
For Gold to demolish and reverse this scenario a close below 1,800.
Gold is above the Ichimoku Cloud (shaded area) on both Daily and Weekly i.e., in a Bullish mode.
Silver in a steep rising trend with no RSI divergence suggesting Silver is to trade higher. A test of February peak at around 24.63 is likely before a correction.
Weekly RSI is positive and about to break back above 60 indicating higher Silver prices. A move to the strong resistance area 25.85-26.45 is in the cards. The latter level is also the 1.382 projection of the Q1 2023 correction. Positive weekly RSI and MACD about to turn bullish supports the Bullish Silver picture.
However, the bullish move could be a bit slow or sluggish, the 55 and 100 weekly MA’s are still declining whereas the 21 and the 200 MA’s are rising which is an indication of and underlying indecisive sentiment.
However, to reverse this bullish trend a close above 19.90 is needed.
Medium- to longer term. If Silver closes above 24.65 uptrend has been confirmed and previous peaks around 30 is likely to be tested. Resistance at around 26.95.
Silver is above the Cloud on both Daily and Weekly i.e., in a Bullish mode.
Gold/Silver ratio broke below its rising trendline after reaching 0.786 retracement at 91.80. The current decline could drop to the 0.618 retracement at 81.12 maybe dipping down to touch the support at around 80.61 before a rebound.
Medium-term. Weekly RSI still showing positive sentiment (needs to close below 40 threshold to reverse to negative) so if Silver bounces from the 0.618 retracement at 81.12 to resume uptrend Silver could be set for a test of the strong resistance at around 96.
But if Silver continues below 81 to close a week below 79 Silver is likely to test key strong support at around 74.57.
Latest Market Insights
Quarterly Outlook 2024 Q3
Sandcastle economics
-
-
Bonds: What to do until inflation stabilises
Discover strategies for managing bonds as US and European yields remain rangebound due to uncertain inflation and evolving monetary policies.
-
Equities: Are we blowing bubbles again
Explore key trends and opportunities in European equities and electrification theme as market dynamics echo 2021's rally.
-
FX: Risk-on currencies to surge against havens
Explore the outlook for USD, AUD, NZD, and EM carry trades as risk-on currencies are set to outperform in Q3 2024.
-
Commodities: Energy and grains in focus as metals pause
Energy and grains to shine as metals pause. Discover key trends and market drivers for commodities in Q3 2024.
Disclaimer