Technicals w/e 28 Nov 08

Silver

Despite failing to hold the $10.60 level last week, the silver technicals remain positive. The weekly MACD should see a cross over next week or the week after. This heavily used indicator should bring many momentum traders back into silver. $10.60 remains upside resistance but if we can break this decisively expect a brief pause at $11.39 but from there its straight to $13.66. The $10 range remains good support on the downside.

Silver in USD weekly (click on chart for larger view)



Gold

The $825 range remains strong resistance for gold. However, like silver, the MACD set up is extremely bullish. The cross over for gold likely to occur very soon. MACD cross overs from very low levels supported uptrending RSI and declining price is one of the most bullish technical set ups you can have. It is my view that gold will break resistance at $825 this week and head to $880 immediately. If the range breakout occurs we should see a retest of the all time highs of $1034 before Christmas.

Gold in USD weekly (click on chart for larger view)



Gold in Australian dollars

It is not widely publicised but gold is hitting record highs against the Euro, Swiss franc, South African Rand, Canadian dollar, British pound, NZ dollar and the Australian dollar. In fact year to date gold is up 29% in Australian dollar terms. Given stocks are down 40-50% over the same period gold is a stand out. Whilst a rise in the Australian dollar could limit the near term upside the technical picture is still very constructive. We have tested and failed at the $1300 resistance several times in recent weeks. With a good support now at $1226 I believe the next move up will break this resistance and move quickly to $1415.


Gold in AUD weekly (click on chart for larger view