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(Getty Images/iStockphoto)
(Getty Images/iStockphoto)

Gold, silver suffer serious technical damage, more downside seen ahead Add to ...

Gold and silver futures prices are sharply lower and have careened to 2.5-year lows in early U.S. trading Thursday.

The marketplace sees traders and investors in a keen “risk-off” mentality following Wednesday’s U.S. Federal Reserve events. Fresh, serious technical damage has been inflicted in the gold and silver markets to suggest they will see still more downside price pressure to come.

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Comex August gold last traded down $70.10 at $1,303.90 (U.S.) an ounce. The August contract traded down to a low of $1,285.00 in overnight trading. Spot gold was last quoted down $46.40 at $1,305.25. July Comex silver last traded down $1.458 at $20.165 an ounce. July silver hit a low of $19.64 in overnight trading.

Technically, the gold market took another major bearish hit Thursday by dropping to a 2.5-year low, and importantly dropping below what was a very important chart support level at the April low of $1,323.00. Now, the door has been opened wide for more technical selling pressure in gold in the near term. The next major, longer-term downside price targets are $1,227, and then at $1,100 and then at $1,027 for nearby Comex futures.

August gold futures prices are in an eight-month-old downtrend on the daily bar chart. The gold bulls’ next upside near-term price objective is to produce a close above solid technical resistance at the May low of $1,338.00. Bears’ next near-term downside breakout price objective is closing prices below solid technical support at $1,250.00. First resistance is seen at the April low of $1,323.00 and then at $1,338.00. First support is seen at Thursday’s low of $1,285.00 and then at $1,275.00.

Silver bears have the strong overall near-term technical advantage and gained more power Thursday as prices dropped to a 2.5-year low and fell below what was major psychological support at $20.00. Like gold, fresh major chart damage has been inflicted Thursday to suggest still more strong downside price pressure in the near term. Prices are in an overall eight-month-old downtrend on the daily bar chart.

Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at $21.50 an ounce. The next downside price breakout objective for the bears is closing prices below solid technical support at $19.00. First resistance is seen at the April low of $20.25 and then at $21.00. Next support is seen at the overnight low of $19.64 and then at $19.50.

 

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